Jamie Dimon wants US companies to focus on their employees, communities and customers in addition to their stockholders — unless you’re talking about Dimon’s company, that is.
JPMorgan Chase’s billionaire boss and board have rejected a call to turn the megabank into a so-called “public benefit corporation” that embraces “stakeholder capitalism,” which claims that large public companies can create long-term value for shareholders by paying and training employees and focusing on the communities they serve rather than their stock prices.
That’s despite the fact that the Business Roundtable — a powerful group of CEOs chaired by Dimon — had publicly endorsed the idea in 2019 in what it called its “statement on the Purpose of a Corporation,” according to a Tuesday report from Reuters. At the time, Dimon said that the new policy “will help to set a new standard for corporate leadership.”
But after pressure to follow through on its pledge from activist investor John Harrington, JPMorgan’s board — which is also chaired by Dimon — ruled against converting to a stakeholder focus, citing a legal review that found putting shareholders second would violate the bank’s fiduciary duty.
“What they said was meaningless,” Harrington told Reuters on Tuesday.
“Serving the interests of all stakeholders – not just shareholders – is essential to having an economy that creates opportunity for everyone and how we do business” a JPMorgan spokesman said in a statement to The Post, before citing the $30 billion commitment that the bank made to close the racial wealth gap in October.
“Our company is only as strong as the customers, employees and communities we serve, and our commitment to this is reflected in our investments to advance racial equity and create an inclusive economic recovery.”
Harrington also told the outlet that he plans to keep up pressure on other banks run by CEOs who signed the Roundtable statement and has already sent letters to Bank of America and Wells Fargo.
Bank of America told Harrington in a Feb. 5 letter that it plans to hold a vote on his proposal at its annual meeting.
But it also stated its board will recommend investors vote against the idea for reasons including that it already operates in a way that balances shareholder and stakeholder interests, and because “The public benefit corporation model is new, largely untested, and is therefore inappropriate for a company of our size and complexity.”
A Bank of America spokesman declined to comment further.
A spokeswoman for Wells Fargo noted the bank previously studied and rejected the idea.
In January 2020, Wells Fargo’s board said it could already consider stakeholder interests “without the significant uncertainties, costs, and distractions” that conversion would require.
With Post wires