Jamie Dimon, Tim Cook and unanswered questions
Why do companies allow the CEO and chairman to be the same person?
Sometimes I don't get it. I thought I was reasonably intelligent, but the world has a way of making one feel clueless. Two such "say what?" occasions occurred recently.
The first was the JPMorgan Chase nonbinding stockholders’ vote to determine whether Jamie Dimon should retain both the CEO and the chairman's title. The second was a visit to Capitol Hill by Apple CEO Tim Cook to discuss tax matters.
Leading up to the JPMorgan vote, the business shills of CNBC and Bloomberg expressed total indignation over how anyone could be so disrespectful of Mr. Dimon. Don't stockholders realize that he is the premier Wall Street CEO and that JPMorgan is wildly profitable? Outside of a minor $5 billion trading hiccup, Mr. Dimon pretty much walks on water.
For Mr. Dimon's part, he threatened to tender his resignation if stockholders voted to strip him of his chairmanship. Now that's mature. Obviously, he would be unable to perform as CEO without also having control of the board of the directors. And clearly — at least according to the media lapdogs — Mr. Dimon is irreplaceable.
Fortunately, disaster was averted when stockholders came to their senses. Only 34 percent voted to separate the role of CEO and chairman. America should be thankful because had the vote gone the wrong way, the country could be facing another financial maelstrom.
Clear conflict of interest
Here's what I don't get: Isn't the role of the board of directors to oversee management and ensure that they are acting in the best interest of stockholders? And can someone explain to me how in the process of performing that role, the ability of the CEO to do his or her job is impeded?
Yet, in manipulative Wall Street fashion, this vote became a referendum on Jamie Dimon and not a matter of good corporate governance. The full spectrum of propaganda was spewed: separating the two roles would make Dimon less effective; activist shareholders were merely trying to stick it to the big banks; you can't recruit top talent without offering both roles. Blah blah blah.
But my simple mind is only capable of viewing this issue simplistically: The CEO should never be permitted to hold the chairman's title because a clearer example of conflict of interest does not exist. How can the board of directors perform its oversight function if the person they are overseeing is running the board? I wish someone could provide a satisfactory answer to that question — I mean, other than to say it's a non-issue because executives are clearly honest people who always operate in stockholders' interests.
The Tim Cook visit to Washington would be laughable if it didn't illustrate the sad state of leadership in this country.
The Senate's Permanent Subcommittee on Investigations was, of course, not attempting to investigate anything beyond how they could generate some sound bites to use as campaign fodder. If they truly had the best interests of America in mind, they wouldn't be grilling Mr. Cook for doing his job, they would be doing theirs.
I applaud Mr. Cook for standing his ground. When asked about "sheltering" billions of dollars from the IRS, Mr. Cook stated emphatically that Apple pays all the taxes it is obligated to pay. And Mr. Cook is doing precisely what he is paid to do: minimize his company's tax burden.
If the grandstanders on the Senate subcommittee were doing their jobs, they would be working to eliminate egregious special interest tax loopholes, rather than attempting to generate PR points.
Tony Paradiso of Wilton is an author, professor, entrepreneur, radio and TV commentator. His website is tonyparadiso.com.