J.P. Morgan Chase & Co. (JPM) plans to elect former Freddie Mac director Linda B. Bammann and General Electric Co. (GE) Vice Chairman Michael A. Neal to its board.
The move comes less than two months after Honeywell International Inc. (HON) Chief Executive David Cote and American Museum of Natural History President Ellen Futter said they would step down after the pair drew less than 60% support from shareholders at the company's annual meeting and emerged as targets of activist investors who blamed them for risk-management lapses.
A shake-up of the board had been expected after the shareholder vote as investors made it clear they wanted improvements following a trading fiasco that cost the bank more than $6 billion. The "London Whale" trading losses in 2012 that raised questions about oversight and governance at the nation's largest bank.
In July, The Wall Street Journal had reported that J.P. Morgan was looking for new directors with not only expertise in risk and finance, but also with global experience and the ability to "think and act like investors," citing a person familiar with the search. The source also told the paper that a high priority was for one of the new picks to be a woman.
Ms. Bammann served as a director of Freddie Mac from late 2008, after it entered conservatorship, until July of this year, where she served as the chair of the board's business and risk committee. She will join J.P. Morgan's risk policy committee.
Ms. Bammann also served as chief risk officer at Bank One Corp. from 2001 until it was bought by J.P. Morgan, and as J.P. Morgan's deputy head of risk management before her retirement in 2005.
Meanwhile, Mr. Neal previously served as chairman and CEO of GE Capital until June of this year. He intends to retire from GE at the end of the year. He joined GE in 1979 and moved into GE Capital eight years later.
Ms. Bammann is expected to be elected on Sept. 16, while Mr. Neal is expected to join the board in January 2014, after he retires from his current position.
Separately Monday, J.P. Morgan also said it won't rotate the lead independent director position on an annual basis any longer. Lee R. Raymond is currently the bank's lead independent director.
It said directors, including the lead independent director, will be available for consultation with major shareholders and that executive sessions--without company management--will take place at every regularly scheduled board meeting.
Shares rose by 30 cents to $52.86 in recent trading. The stock has dropped 3.2% in the past three months.
Write to Saabira Chaudhuri at firstname.lastname@example.org
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(END) Dow Jones Newswires
September 09, 2013 09:45 ET (13:45 GMT)
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