BlackRock vote on Dimon’s future highlights ties to JPMorgan

Fink’s Roles

“I don’t even know what is happening on this one issue and it would not be proper for me to know for the independence of this team,” Fink said. Asked if he’s talked to Dimon about the topic, he said “I’ve had conversations with Jamie.”

BlackRock, which has been publicly traded since 1999, hasn’t faced any shareholder proposals, let alone one that would separate Fink’s chairman and CEO roles, according to data compiled by FactSet Research Systems Inc.

The JPMorgan vote, coming more than a year after the trading loss that led to congressional hearings and the departure or demotion of about a dozen executives, is a referendum on Dimon, whom President Barack Obama called “one of the smartest bankers we’ve got.”

Fink and Dimon are both Democrats and have been named in the past as potential Treasury Secretary candidates. Each played a role in helping the government during the financial crisis, with JPMorgan buying Bear Stearns Cos. and Washington Mutual Inc. and BlackRock managing portfolios of assets acquired by the Federal Reserve from Bear Stearns and American International Group Inc.

BlackRock’s Platform

Dimon has a higher public profile. He’s a regular at the World Economic Forum in Davos, Switzerland, an event that Fink eschews. And while Dimon took a politician-style bus tour last year to meet with employees and clients, Fink has said he’s a reluctant promoter of himself and his business.

“I don’t like being that visible in the industry -- I much preferred the first 12 years when no one knew who BlackRock was,” he said in an interview last year. “But I don’t think I could stand there and say our voice could be silent anymore. Our scale, our visibility, our business model has given us a platform in which we need to have a voice on behalf of our clients.”

Branding Campaign

BlackRock began a five-year branding campaign last year as it seeks to get investors back into higher-yielding assets such as stocks and expand its retail business. Fink has said clients need to diversify and can be harmed by staying in cash-like products. Earlier this week, he spoke at New York University’s Stern School of Business about the need for retirement-savings reform and creating a mandatory savings system.

Last year’s e-mail on the trading loss from Rubin, who selects stocks for some of the firm’s large-cap value mutual funds, demonstrated how assertive the asset manager can be. Youngwood’s notes, e-mailed to Dimon and seven other JPMorgan executives, called for “an aggressive response on four fronts,” including a look at cost reductions and a stock buyback.

The notes were made public earlier this year by the U.S. Senate Permanent Subcommittee on Investigations, whose report said Dimon misled investors and dodged regulators in an effort to hide escalating losses at the bank’s chief investment office. JPMorgan has said that senior management acted in “good faith” and never intended to mislead anyone.

Bloomberg News

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus