DealBook: JPMorgan Board Confirms Dual Role for Dimon

JPMorgan Chase’s board said on Friday that it was standing behind Jamie Dimon, the bank’s chairman and chief executive, in the face of calls from some investors that the two jobs be split.

In the bank’s proxy filing, the 11-member board said that Mr. Dimon should continue to hold both positions, as he has since 2006. “The board has determined that the most effective leadership model for the firm currently is that Mr. Dimon serves as both,” the filing said.

In the wake of a multibillion-dollar trading loss that roiled the bank’s executive ranks, some investors have been calling for JPMorgan to separate the roles. In February, a vocal group of shareholders, including the American Federation of State, County and Municipal Employees and pension funds in New York and Connecticut filed a resolution to divide the chairman and chief executive posts.

The effort appeared to gain momentum last week after a Senate hearing and scathing report into the trading losses, which stemmed from a soured bet on credit derivatives. The 301-page Senate report painted a critical portrait of Mr. Dimon. As the trades grew more disastrous in 2012, the chief executive failed to rein in the risk, the report found. Instead, he allowed JPMorgan to tweak its internal alarm system, allowing traders in the bank’s chief investment office to continue placing risky bets.

Since announcing the losses, which have swelled to roughly $6.2 billion, Mr. Dimon has struck a contrite note, moving aggressively to overhaul the bank’s management and risk controls.

On Friday, Denise L. Nappier, the Connecticut state treasurer, continued to call for a division of the chief executive and chairman roles.

“We don’t believe the person responsible for these costly mistakes should be overseeing reforms,” she said.

A nonbinding measure on a split received 40 percent backing from shareholders last year, and this year’s resolution is expected to gain new votes as scrutiny of Mr. Dimon grows.

In January, JPMorgan’s board cut Mr. Dimon’s compensation. The decision came after a series of marathon meetings led by Lee R. Raymond, the former chief executive of Exxon Mobil, who heads the board’s compensation committee. The board voted unanimously to reduce Mr. Dimon’s pay to $11.5 million, from $23.1 million a year earlier.

Despite that move, the board still supports Mr. Dimon. Under his leadership, the bank has had record profits.

After investigating the trading losses at the bank, the board determined that while Mr. Dimon had “ultimate responsibility” for the losses, he took strong steps to stem the losses and rectify the problems. In its filing on Friday, the board said Mr. Dimon “responded forcefully.”

A separate internal report into the trading losses led by Michael J. Cavanagh, co-head of the corporate and investment bank, largely aimed its most withering criticism on the executives who directly oversaw the traders making the troubled wagers.

EADS Confirms Change in Ownership Structure

PARIS — European Aeronautic Defense & Space, the parent company of Airbus, confirmed a major overhaul of its ownership structure late Wednesday that would dissolve a decade-old arrangement that grants the governments of France and Germany an effective veto over strategic management decisions.

The balancing of national interests in EADS was enshrined in a shareholder pact that dates to the group’s creation in 2000. That agreement stipulated that the French and German stakes in EADS must be equal, and until now the two countries have each exercised control of 22.5 percent of the company through a mix of state holding companies and private-sector owners that have acted as proxies for Paris and Berlin.

Under the terms of the new agreement, KfW, a German state-owned bank, will acquire a 12 percent stake in EADS — giving Berlin its first direct stake — while France will reduce its voting rights to 12 percent from 15 percent. A Spanish government holding company will have its stake shrink to 4 percent from around 5.5 percent.

The two large private-sector shareholders that have served as proxies for Berlin and Paris are expected to substantially reduce their stakes “either immediately or in the near future,” EADS said, in part through a general buyback of up to 15 percent of its shares planned in the first quarter of next year.

The German carmaker Daimler, which holds 15 percent of EADS shares and 22.5 percent of its voting rights, said in a separate statement that it planned to reduce its holdings before the end of 2012. Daimler did not say how much of a stake it would sell, but EADS said the initial disposal would amount to a 7.44 percent stake, including a 2.76 percent stake to be sold to KfW.

Lagardère, the French magazines-to-missiles conglomerate that owns 7.5 percent of EADS, said it would sell most of its holding — 5.5 percent — back to EADS under the buyback program.

Under the new governance structure, France, Germany, Daimler and Lagardère have also agreed to relinquish special rights, granted them under the previous accord, to a veto over certain management decisions, including major acquisitions.

“The agreement aims at normalizing and simplifying the governance of EADS while securing a shareholding structure that allows France, Germany and Spain to protect their legitimate strategic interests,” EADS said.

The changes will eventually increase the “free float” of publicly traded EADS shares to more than 70 percent from 49 percent currently, EADS said.

It said it would convene an extraordinary meeting of all shareholders in the first half of 2013 to approve changes to the ownership structure and to elect a new slate of directors.

EADS proposed that the new board be comprised of 12 members, rather than 11 currently, and include “at least” 8 independent members. The majority of board directors, as well as two-thirds of the members of the group’s executive committee, would be European Union nationals, EADS added.

EADS has long sought a new shareholder arrangement that would preserve the politically sensitive balance of influence between France and Germany without subjecting key management decisions to the approval of politicians in Paris and Berlin.

The impact of such political interference was on prominent display in October, when the German government led by Chancellor Angela Merkel failed to give its blessing to the merger of EADS with BAE Systems of Britain, a deal that would have created the world’s largest aerospace group.