Few people are in a position to influence Jamie Dimon, the chief executive who turned JPMorgan Chase into the biggest U.S. bank. The longtime climate skeptic who turned Exxon Mobil into the biggest U.S. oil company is one of them.
Lee R. Raymond, 81, holds the top position on JPMorgan's 11-member board after Dimon. He has occupied his seat for 33 years, making him both the longest-serving and oldest director among Wall Street's biggest banks. He helped guide JPMorgan through megamergers after mastering them at Exxon, backed Dimon during his rise and has stood by him. Even as the bank draws fire for lending billions to the fossil-fuel industry, the former oil executive's power inside the $2.7 trillion financial firm has gone little noticed.
That's about to change.
A nonprofit group called Majority Action is beginning a fight this week to use shareholder voting to remove Raymond from JPMorgan. The group argues that Raymond's role as the lead independent director and his coziness to Big Oil compromises JPMorgan's capacity to react to the climate crisis.
"This is really going to be an important moment," said Eli Kasargod-Staub, executive director of Majority Action. "The gap between what is needed and JPMorgan's behavior is egregious."
The oil veteran's relationship with Dimon gives him special status inside the bank, and makes the campaign against him a long shot. Raymond is described in public filings as the chief executive's sounding board, adviser on long-term strategy and guide for annual performance reviews, as well as a key voice in who will one day succeed him. He oversees the board's agenda, has the discretion to call members together whenever he wants, and runs meetings in Dimon's absence.
Raymond has a reputation among colleagues for being brilliant, logical and gruff, an old-school businessman. "After everyone had his say or her say, Lee's point of view was heavily influential with everyone else," said former Hearst boss Frank A. Bennack Jr., who served on JPMorgan's board until 2004. "I would describe him as eminently able to influence."
A spokesman for the bank said Raymond "contributes to the success of the company in countless ways." In his leadership, the spokesman added, he ensures "that the board represents a wide range of views and perspectives and hears from them as well."
Majority Action, which works with investors to hold corporations accountable, has managed to win attention from shareholders. The group failed to topple Facebook Inc. boss Mark Zuckerberg but helped pressure the gun maker Sturm Ruger & Co. into engaging with investors over safety concerns. They're now trying to sway JPMorgan into not renominating Raymond or else persuade investors to vote against him at the annual board election in May. Even though he left the top job at Exxon Mobil in 2005, the group sees him as intertwined with the fossil-fuel industry.
The length of Raymond's tenure may help the effort to end it. He should have aged out almost a decade ago, but he has received special approval to stay on past the board's own retirement age of 72. His 33-year run is three times longer than what JPMorgan's own asset-management arm considers appropriate for independent directors across most of the world.
Dimon is the only top executive to remain at the helm after leading a big U.S. bank through the financial crisis, and he's the one who ultimately decides how JPMorgan navigates global warming. It had $44 billion of loans out to the oil and gas industry as of the end of the September 2019, the most after Citigroup Inc. Those loans accounted for just 4.7% of JPMorgan's corporate total, a slight decline from a year earlier.
Climate change is already changing Wall Street. JPMorgan's environmental policy now "recognizes that climate change poses global challenges and risks," and the firm is expected to discuss environmental issues at its investor day later this month, according to a person briefed on its plans. Joe Evangelisti, a spokesman, said JPMorgan supports the 2015 Paris Agreement on climate change and is more than halfway to a goal of facilitating $200 billion of clean-energy financing through 2025. "We continually strengthen our practices and policies around environmental issues, with more to come," he said.
Last year, in another example of climate concern reaching into high finance, Goldman Sachs Group Inc. pledged to turn down financing that supports new coal mines and upstream Arctic oil exploration. The European Investment Bank, the lending arm of the European Union and the biggest multilateral financial institution in the world, recently adopted an unprecedented strategy to end funding for fossil-fuel energy projects.
Things were different when Raymond was a master of the oil industry. He joined Exxon Corp. in 1963 and rose to the top job three decades later. During his time at the helm he cut investment in renewable fuels, pushed countries to unite against emission limitations, and in 1997 said the planet was cooling. The head of Greenpeace's climate campaign once called him "the Darth Vader of global warning."
JPMorgan has been a top banker to Exxon for decades and advised on two of its biggest takeovers, including the merger that created Exxon Mobil in 1999 by reuniting two old pieces of the Standard Oil monopoly. Only a few months later, as a board member of what was then J.P. Morgan & Co., Raymond encouraged the merger with Chase Manhattan Corp., according to a person who worked with him. The two corporate giants Raymond helped put together are among the few public U.S. companies to have ever made more than $35 billion in annual profit.
JPMorgan has relationships with other members of Raymond's family. It has extended credit to an energy-investment firm run by one of Raymond's triplet sons, according to public disclosures, and companies connected to Energy & Minerals Group, a private equity firm run by a second. The third son runs a drilling company in which the four men have owned stakes, according to a 2018 filing. (JPMorgan said it doesn't comment on specific clients.)
Wall Street's profits from the oil industry are under more scrutiny than ever. Dimon said at the World Economic Forum in January that climate change will be solved by government policy, not "beating up on fossil fuel companies and banks." A few weeks later, environmental activists disrupted a talk he gave in Florida.
They've criticized his rivals, too. Climate protesters with whistles and drums stopped traffic outside Goldman's London office last April, and others kept Wells Fargo & Co. employees from entering its San Francisco headquarters in September.
Majority Action's new effort against Raymond, backed by the environmental group Rainforest Action Network, shows there are more targets at big banks than chief executives. "In an era when the world is clearly coming to understand that climate change is the greatest threat we've ever faced, that annual vote is a big slap in the face to anyone who cares about the future," said the environmental activist Bill McKibben, who was arrested at a branch of the bank in Washington last month while protesting against oil investments.
"There's a big campaign against Chase," he said, "and it's going to get bigger."
