NEW YORK (Reuters) - JPMorgan Chase & Co
The investors, including the American Federation of State, County and Municipal Employees, the Connecticut Retirement Plans and Trust Funds, Hermes Fund Managers and the New York City Pension Funds, have a proposal on JPMorgan's proxy to split those roles.
If approved, the proposal would be another blow for the largest U.S. bank and its chairman and CEO, Jamie Dimon.
JPMorgan has a presiding director, former Exxon Mobil Corp
"An independent chair of the board of directors will eliminate the structural conflict of interest caused by the CEO being his own boss, and will clarify where the authority of the CEO ends and responsibility of the board begins," the investors said in their letter.
A similar proposal AFSCME made for JPMorgan last year was defeated. However, the bank's $6.2 billion loss on a derivatives trade, called the "London Whale" because of its size, has put management under more pressure.
The trade went undetected by management until it started hemorrhaging money. That led to questions about JPMorgan's risk-management culture, which had previously been seen as pristine. A U.S. Senate subcommittee report on March 15 criticized management for failing to catch the bad trade earlier.
In the proxy, JPMorgan's board advised against voting for the investors' proposal, saying the performance of the bank has been strong under its current leadership setup and that its actions following the Whale losses "demonstrate strong, independent oversight."
JPMorgan reported record earnings in 2012 despite losses from the bad trade, and its shares have outperformed those of rivals. After the Whale trade was uncovered, management set up an internal task force to review losses, and the board established an independent review committee as well.
"The Board has determined that the most effective leadership model for the Firm currently is that Mr. Dimon serves as both Chairman and Chief Executive Officer," it said in JPMorgan's proxy.
(Reporting by Lauren Tara LaCapra; Editing by Lisa Von Ahn)