April 17, 2013
The era of the imperial Wall Street chief executive has ended, the Wall Street Journal declares. The spring proxy season of shareholder meetings will provide a glimpse of what’s coming next — a corporate world in which CEOs are executives more than chiefs.
For banks, annual meetings used to be attended mostly by small shareholders with axes to grind, but the 2008 financial meltdown changed all that. Now the meetings attract scrutiny from aggressive shareholders such as hedge funds, state pension funds and union-led activists.
“Our investor-relations department used to be two people who dealt with analysts and a couple of large shareholders,” a longtime Wall Streeter is quoted as saying. “It’s now several people dealing with a whole array of constituents: analysts, credit-rating agencies, shareholders and the activist crowd.”
Regardless of whether these new demands are an unwelcome distraction for executives or a long-overdue dose of accountability, the issues they raise are here to stay.
Among the challenges facing Wall Street banks this season is a vote on whether Jamie Dimon’s role as chairman and CEO of J.P. Morgan Chase should be split. Says Lisa Lindsley, director of capital strategies at the American Federation of State, County and Municipal Employees, “If you have the person who is the top manager also running the board, he is his own boss and there is no oversight.” — Greg Beaubien