Receiving Wide Coverage ...
Sick of JPMorgan Yet? The Times' "Deal Professor," Steven Davidoff, calls the fight over the upcoming JPMorgan shareholder vote "silly." Though severing the chairman and CEO roles has improved governance at many companies, he writes, "not all companies are alike," and he finds the benefits of the independent-chair model for a large, complex bank dubious. "No study to my knowledge has ever found that companies that do such a split are better at risk management.
Does anyone really think that the JPMorgan board sits with complex spreadsheets looking at the bank's risk positions? Does anyone think it should?" Davidoff doubts an independent chairman would have prevented the London Whale debacle. Echoing colleague Andrew Ross Sorkin's column yesterday, he suggests the vote is more a referendum on chairman and CEO Jamie Dimon, and on big banks, than on corporate governance.
A news article in the Times reports that Dimon has been seeking counsel from Wallace Shawn, er, Lloyd Blankfein, about how to live in the uncomfortable spotlight of Congressional and media scrutiny.
Shareholder support for severing the chairman and CEO roles "is running slightly ahead of the 40% it received last year," the Journal reports, citing an anonymous source. (At Gallup or Zogby?)
Some big shareholders who want Dimon to remain chairman nevertheless plan to vote against re-election of certain directors, the FT reports. Ellen Futter, in particular, is "a lightning rod for corporate governance activists, whose qualifications to serve on the board's risk committee have been questioned." She runs the American Museum of Natural History (cue the dinosaur jokes) and is a former director of AIG who resigned from that board in July 2008, shortly before the government takeover (cue more dinosaur jokes).
The paper also reports that trading revenues in JPMorgan's investment bank are on track to post a double-digit gain this quarter from a year earlier.
We'll give the last word to a Journal reader who commented, "It is remarkable the amount of coverage this story is getting. Don't you guys have anything else to write about?"
More Job Cuts at HSBC: The British bank aims to save $3 billion by axing another 14,000 workers. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
Remember those preferred shares in Fannie Mae and Freddie Mac that lost all their value and crippled so many community banks? They're still out there, available for purchase, and some hedge funds have been buying. "The best-case scenario for the investors would be that the government raises fresh capital for the companies and sells its stake on the market. That way, the investors hope, preferred shareholders might be paid out." The problem with this bet is that the administration is dead set against recapitalizing the GSEs, preferring to phase out rather than reprivatize them. Republican Sen. Bob Corker calls the preferred paper a "lottery ticket."
New York Times
Peter Thiel, a co-founder of PayPal, is investing in TransferWise, a London startup that aims to disrupt the foreign-exchange transfer business. TransferWise's Estonian founders "started the company after growing frustrated after losing around 5 percent of their salaries to bank charges when they moved money between Estonia and Britain." By enabling such transfers at lower fees than typically charged by big institutions, "TransferWise demonstrates true innovation in banking by enabling its users to retain their wealth across borders," Thiel says.
