Jamie Dimon will face shareholders on Tuesday.
NEW YORK (CNNMoney) — Even as he apologized for a $2 billion trading loss, shareholders approved JPMorgan Chase CEO Jamie Dimon’s $23 million pay package Tuesday at the bank’s annual meeting.
The meeting comes just days after the bank disclosed the massive trading loss, an event that led to the departure of its chief investment officer and forced its CEO to repeatedly apologize for the bank’s actions.
“This should never have happened. I can’t justify it. Unfortunately these mistakes were self inflicted,” Dimon told shareholders just after the meeting began.
The $2 billion loss resulted from trades that were originally designed to hedge against risk, but grew in size and complexity, raising questions about whether the bank’s actions violated the spirit of the Volcker Rule.
That rule, a part of the Wall Street reform law passed in response to the financial crisis, aims to ban risky trading by banks for their own profit, a strategy sometimes referred to as proprietary trading.
Dimon said Tuesday that he believes it is important for the bank to continue to be able to hedge against risk, but that he also recognizes the need for rules that “ensure hedging doesn’t morph into something different.”
“What this hedge morphed into violates our own principles in terms of complexity and risk,” Dimon said.
Dimon, who also serves as the bank’s chairman, is facing shareholders who have seen the company’s stock decline by more than 14% over the previous five trading sessions.
Those shareholders offered preliminary votes on a series of proposals on topics including political contributions, controversial investments in Sudan, and executive compensation, including Dimon’s $23 million compensation for 2011.
Final vote totals will be filed with the Securities and Exchange Commission, but preliminary results showed that shareholders approved of the bank’s executive pay packages by a nine-to-one margin.
Shareholders also considered a proposal that calls for the appointment of an independent chairman, which would strip Dimon of some of his power.
The bank’s board of directors was firmly opposed to this idea, saying in a recent proxy statement that such a move could cause “uncertainty, confusion and inefficiency in board and management function and relations.”
Others were not so sure. Glass Lewis Co., a governance analysis and proxy voting firm, had recommended the positions be separated as corporate governance is weakened by allowing one individual to perform both jobs.
Shareholders were split on the issue, with preliminary results showing that only 40% support the proposal.
In the wake of the 2008 financial crisis, shareholders have looked upon the nation’s largest banks with increased scrutiny, and have often used shareholder meetings to push an agenda of reform.
The JPMorgan (Fortune 500) meeting moved briskly on Tuesday, with the official meeting lasting less than one hour and concluding just before 11:30 a.m. ET.,
A smattering of protesters were on location, holding signs that criticized the bank for its actions in the housing market and some that alluded to the bank’s $2 billion loss.
Dimon has been in full damage-control mode in recent days. After holding a hastily-arranged conference call to announce the loss, the CEO followed that with an appearance on Meet the Press, where he admitted the company had made a mistake.
And on Monday, the bank announced the retirement of Ina Drew, the firm’s chief investment officer and the supervisor of the bank’s chief investment office.
The vote, mandated by the “say on pay” regulations in the Dodd-Frank financial reform bill, is non-binding, but marked the first time shareholders have rejected executive pay packages at a major bank.
F. Daniel Siciliano, a professor at Stanford’s Rock Center for Corporate Governance, predicted on Monday that “fireworks are likely to be modest.”
That’s because Tampa is an out-of-the-way location, and many shareholder votes have already been cast.
“In theory, people can change their votes on their proxy,” Siciliano said. “But by and large, mechanically, that tends to not happen.”