JPMorgan, Citi Shareholders Will Vote On Breakup Proposal

In the past, the catchphrase has been “bigger is better” in banking, and now, the converse may be true.

Holders of JPMorgan Chase & Co. and Citigroup Inc. will be voting on that very idea and whether those big banks should be winnowed down.

The New York Times reported that that issue is among those featured in the proxy statement filed by the company on Wednesday (March 16) with the Securities and Exchange Commission. The statement was filed in advance of Citi’s annual meeting scheduled for next month.

Similarly, NYT reported that the shareholder advancing the Citi proposal — Bart Naylor — has also posed a similar question to the holders of JPMorgan, which will be on the docket and voted on at that firm’s annual meeting. He’s tried to advance similar proposals in the past, with one last year at Bank of America that received only a 4 percent vote.

In an interview with NYT, Naylor said his current proposals “are more deferential to the boards in asking them to study the vicissitudes of a breakup … These banks are too big to manage.” One measure of support that he hopes to see is the backing of proxy advisory firms, which traditionally can carry weight with shareholders on the strength of their recommendations tied to certain shareholder proposals.

Perhaps not surprisingly, Citigroup’s own directors have voiced their opposition to the measure, with a nod to the bank’s efforts to streamline, such as jettisoning roughly $500 billion in assets through the past eight years.

Naylor told NYT that his earlier BoA proposal failed because he had not properly certified that he owned shares.