JPMorgan, Dimon, and the Debate Over CEOs | Rebecca Ungarino posted on the topic | LinkedIn (2024)

Consistently sensitive, careful, incisive reporting over the last couple weeks from Reed Alexander on the death of a young BofA banker that’s worth your time:

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News in Barron's: Jamie Dimon, who has run the largest U.S. bank for nearly two decades as CEO of, spelled out some unwelcome news for long-term and short-term shareholders on Monday.JPMorgan shares fell 4.5% — worst performer in the S&P 500 and the Dow today — after he said in response to a question at the bank’s investor day in New York City that the company wouldn’t repurchase stock at current levels. Even though Dimon has suggested that in the past, his comments hit the price. He said: “To make it really clear: We’re not going to buy back a lot of stock at these prices."For long-term investors, the bad news came in the form of a succession update. Dimon, who is 68 years old and one of the longest-tenured Wall Street CEOs, appeared to indicate that planning for his replacement was more advanced than in the past. He said the choice was ultimately the board’s and that he has “the energy that I’ve always had." “We’re on the way. I mean, we’re moving people around,” Dimon said in response to a question from the always straight-to-the-point Wells Fargo analyst Mike Mayo about how much longer he intended to stay on as CEO.Both dynamics weighing so heavily on the stock today is interesting because these two things ... are, I mean, fairly obvious and I figured would have been baked into the share price already. But investors were clearly hoping for more. Very curious what people think about this and tips / feedback on succession (from unlikely/uncovered angles!) for future stories: rebecca.ungarino@barrons.com

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Fascinating personnel news on Barron's: Vanguard Group, the world’s second-largest money manager, said on Tuesday that it would name former topBlackRockofficial Salim Ramji as its next chief executive. He starts in July.Privately held Vanguard started a search for a new CEO in February after longtime executive Tim Buckleysaid suddenlythat he had decided to leave the position. Buckley has been CEO since 2018 and joined the company in 1991 as an assistant to founderJack Bogle.Buckley’s surprise announcement prompted industry speculation over who would step into one of the most important roles in financial services—at a firm that has long managed to keep details of its internal dynamics closely held in spite of its scale.Ramji, who led BlackRock's iShares business, is stepping into the CEO role at a time when there has never been more attention on asset managers. Lawmakers, institutional investors, shareholder advocates, and the wider public are scrutinizing the largest money managers’ enormous impact on the economy. He had a front-row seat to those criticisms of size and power while at BlackRock. There Ramji led a new program that aims to give more individual investors a say in voting on companies’ policies as the firm faced challenges over its influence as a shareholder through its funds.

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New for Barron's: BlackRock has come under pressure in recent years over its unparalleled size, enormous influence in voting on other public companies’ policies as a shareholder through its funds, andsustainable investing practices.Joining the criticisms: the way the firm pays its top management.The two most influential U.S. proxy-voting advisors, ISS and Glass Lewis, are recommending that shareholders vote against approving 2023 pay packages BlackRock is looking to award top executives—including CEO and co-founderLarry Fink—at its annual shareholder meeting on Wednesday.“One of the reasons that BlackRock is a particular concern is that BlackRock also votes on pay packages," one consultant told me. "If BlackRock itselfhas a problematic pay package, that suggests a tolerance for high pay."A BlackRock spokesperson told me the company "has a longstanding pay-for-performance culture, and our executive compensation program is based on the same metrics-driven approach that has received substantial shareholder support in prior years." S&P 500 companies very rarely fail on say-on-pay proposals. Very curious what investors think about all this and how the votes will come in tomorrow on this proposal and the CEO/chair split proposal from Bluebell Capital Partners. Please send me feedback and tips at rebecca.ungarino@barrons.com

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New for Barron's: On the face of it,Bank of AmericaandGoldman Sachs’s annual shareholder meetings this week were uneventful—no blowout wins forlong-shot proposals, no drawn-out battles withinfamous activist funds. But among the sea of shareholder resolutions, two failed proposals warrant a closer look.The two resolutions called on BofA and Goldman to implement policies to prevent the chief executive from also holding the title of board chair—both banks’ CEOs, David Solomon and Brian Moynihan, currently do—in the interest of sounder corporate governance and checks on power. While this has been a longstanding debate, what stands out is the increased support these proposals drew when shareholders’ votes were tallied on April 24.Very curious what people think about this ahead of these proposals also being on the ballot at Citi, BlackRock, and this proxy season. It's obviously not a new issue. Some folks I spoke with said it seemed inevitable that firms will eventually more widely adopt the policy, though, especially after JPMorgan separates the titles once Dimon is replaced as CEO. (Although, lol, as most people think, that just means he would be able to stick around as chair.)Please keep sending your feedback and tips/ideas! rebecca.ungarino@barrons.com #corporategovernance

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News and first scoop for Barron's:BlackRockis changing its strategy for interacting with wealth-management clients in the U.S., shifting a seasoned fund-distribution executive into a new role designed to cultivate relationships, including with clients in Texas, where it has run into criticism over environmentally conscious investing.The firm, which oversees $10.5 trillion of assets, is also putting a longtime BlackRock wealth leader in charge of reorganized teams catering to U.S. wealth clients,Barron’shas learned. The shift comes as BlackRock, already the world’s biggest asset manager, seeks to expand its ties with rich investors and calm a backlash over oil and gas investment strategy, among other areas.Please keep sending me feedback + tips + interesting emails to rebecca.ungarino@barrons.com and rungarino@protonmail.com!

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Now that earnings from all the big banks are out, my takeaway this morning in Barron's: The tables are starting to turn for Wall Street vs. Main Street. Wall Street businesses are starting to show signs of getting back in control; consumer businesses, not so much. Investment bankers look poised to start winning again after a muted period of stock market debuts and issuance. “We’re seeing that wallet start to rebound.We’re part of that rebound," Citi's CFO said of the firm's investment bank last week.Main Street results are meanwhile starting to more meaningfully reflect the double-edged sword of higher-for-longer rates — a strong income driver for a while — eating into profits as customers seek higher rates for deposits. JPMorgan numbers reflect this dynamic: the consumer and community bank's net income fell 15% from a year prior while IB fees are up 21% in the same time thanks to higher debt and equity underwriting fees. Lots of caveats to this in my piece :) Please keep sending me feedback and tips to rebecca.ungarino@barrons.com.

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First Barron's byline (!)Jamie Dimon uses his annual shareholder letter to promote JPMorgan's interests, tout stuff the bank is doing, analyze the economy, and air his thinking on the U.S. as a world power. He really loves that last part. Sections of Dimon’s letters often take the tone of a politician defending America, stepping outside his role as a private sector executive and into one of a self-styled diplomat.That was all evident in the letter he put out this morning. Interesting reading as an artifact of how more and more finance executives — even if you don't run the largest U.S. bank — communicate now. Send me thoughts at rebecca.ungarino@barrons.com.

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Here are a few takeaways from Larry Fink's annual letter to investors that BlackRock released today. I think looking at these every year is helpful for a few reasons. It's a good exercise in understanding how the world's largest fund manager is marketing itself and what it's looking to sell these days, which in turn often says something larger about the state of the markets: what investors are looking for, what's making money, what's falling out of favor, sometimes a commentary on politics, and so on. And if there is a theme that BlackRock is pushing in the letter, then all of its competitors are likely also focusing on that theme or will be soon.— In this case, Fink and his team talk a lot about retirement. This is a decidedly boring thing where I think, unlike the climate crisis and how to invest to mitigate it, lots of people can agree on at least one basic principle of it: people should be able to retire with dignity and enough money to live comfortably in retirement. If more companies and individual savers are worried about the retirement crisis — and it is a crisis — then BlackRock can benefit from selling products in response to that.— Most people in the U.S. associate rivals Vanguard and Fidelity with managing retirement plans; BlackRock wants to change that and aim to be a bigger player in the market.— Fink says no data point has ever concerned him more than learning that four in ten young Americans say it's "hard to have hope for the world." He says that worries him because if that's the case, then people aren't investing for their futures.— Fink says "the future of infrastructure is public-private partnership," touting the firm's recent giant acquisition of an infrastructure manager.

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