After months of behind-the-scenes lobbying by JPMorgan Chase officials, Jamie Dimon won shareholder support on Tuesday to keep his chairman role. Only 32.2 percent of the bank’s shares supported a resolution to split the chairman and chief executive jobs, compared with about 40 percent of the shares voted last year. JPMorgan’s stock rose as much as 2.6 percent on Tuesday, before closing up 1.4 percent, at $53.02.
“The shareholder resolution, while intended to improve corporate governance by having an independent chairman as a counterweight to a chief executive, became a referendum on Mr. Dimon himself. It was a test he easily passed,†Jessica Silver-Greenberg and Susanne Craig report in DealBook. In an e-mail to employees after the annual meeting, Mr. Dimon wrote: “I love coming to work here every day â€" and hope to be doing it for years to come.â€
Early indications showed the vote was heading to a resounding defeat. But before the annual meeting, Mr. Dimon had to persuade one director, Ellen V. Futter, not to resign. “Ms. Futter, the president of the American Museum of Natural History, was sick of the swirl of negative attention surrounding her, worried that it needlessly detracted from JPMorgan’s strengths and that it might hurt the reputation of the museum, people briefed on the matter said.†But Mr. Dimon “called her on Monday to try to convince her to stay, although he acknowledged that it was a personal decision, the people briefed on the matter said.†In the end, Ms. Futter changed her mind.
The broader lobbying effort, in which influential board members were paired with large shareholders, paid off. “I think that given the resources that the management and the board threw at this, it’s not a surprise that the vote was lower than last year,†said Lisa Lindsley, director of capital strategies at the American Federation of State, County and Municipal Employees union. Still, the preliminary vote totals for Ms. Futter and the other two directors on the risk committee were effectively rebukes. Ms. Futter received just 53 percent of the voting shares, while the two others did only a little better.
APPLE CHIEF EASES TAX TENSION  | “Timothy Cook came to the lion’s den on Capitol Hill on Tuesday, prepared to face down lawmakers furious over evidence that Apple, the famous company he runs, had avoided paying billions in taxes. By the time Mr. Cook walked out, the big cats on a Senate committee were practically eating out of his hand,†Nelson D. Schwartz and Brian X. Chen report in The New York Times. “Even the panel’s fiery chairman, Senator Carl Levin of Michigan, after blasting Apple for creating ‘ghost companies’ that diverted billions of tax dollars from American coffers and caused needy seniors to go without meals, had some kind words for Mr. Cook and his company.â€
Since Apple creates economic value in the United States, it might seem logical for that value to be taxed here. Not so, Victor Fleischer writes in the Standard Deduction column. The problem, he writes, “is the disparity between the value of a product for economic purposes and the value of a product for tax purposes. Economic intuition tells us that the source of Apple’s income is in the United States, but the legal answer is less clear.â€
Apple’s strategy actually was not all that complicated, Floyd Norris writes in his column in The New York Times. The tactic that came in for denunciation at Tuesday’s hearing “seems to have been something known to some tax experts â€" but not to many of those whose job it is to write tax laws.â€
ON THE AGENDA Â |Â The Federal Reserve releases minutes from its April meeting at 2 p.m. Ben S. Bernanke, the Fed chairman, testifies before the Joint Economic Committee of Congress at 10 a.m. Hewlett-Packard and SeaWorld report earnings on Wednesday evening. Data on existing home sales for April is out at 10 a.m.
BUFFETT MAY BE IRREPLACEABLE  | “The ability to make acquisitions on favorable terms is a testament to Mr. Buffett’s personality and skills as a deal maker,†Steven M. Davidoff writes of Warren E. Buffett in the Deal Professor column. “It also highlights an almost unsolvable problem for his company, Berkshire Hathaway, and its shareholders. When its 82-year-old chief executive is gone, who will negotiate such sweet deals?â€
GUPTA’S APPEAL  | When Rajat K. Gupta, a former Goldman Sachs director, was found guilty last year of leaking the bank’s boardroom discussions to a hedge fund, a secretly recorded conversation was perhaps the most critical piece of evidence. “On Tuesday, a lawyer for Mr. Gupta argued that a federal appeals court should overturn his client’s conviction and grant a new trial because the verdict was tainted by the erroneous admission of that statement and other wiretapped conversations,†DealBook’s Peter Lattman reports. The lawyer, Seth P. Waxman, said, “The wiretaps should never have been admitted.â€
Sony Board Weighs Breakup Proposal  | Sony is considering a proposal from the American hedge fund Third Point to spin off part of its entertainment business but emphasized the discussions were preliminary and that the company had set no timetable for a response. DealBook »
Former G.M. Executive in Bid for Fisker  | VL Automotive, a carmaker led by the former General Motors executive Robert A. Lutz, teamed up with the Wanxiang Group, a Chinese auto parts supplier, to make an offer for the embattled car company Fisker Automotive, Reuters reports, citing unidentified people familiar with the matter. REUTERS
Sprint Raises Offer for Clearwire Stake  | Sprint Nextel raised its offer on Tuesday for the nearly 50 percent stake in Clearwire that it does not already own, just hours before shareholders were scheduled to vote on its earlier offer. DealBook »
Philip Morris to Buy Full Control of Mexican Joint Venture  |Â
REUTERS
Temasek Said to Buy Stake in Markit  | Temasek Holdings of Singapore bought a 10 percent stake in the Markit Group for about $500 million, Bloomberg News reports, citing an unidentified person with knowledge of the matter. BLOOMBERG NEWS
Temasek Increases Stake in Chinese Bank  | The Singapore fund bought 280 million shares in Industrial and Commercial Bank of China as Goldman Sachs sold its investment, Bloomberg News reports. BLOOMBERG NEWS
Lloyds Bank Expresses Confidence on Capital Requirement  | The Lloyds Banking Group said on Wednesday that it believed it could improve its capital without issuing new shares or converting bonds into shares, The Wall Street Journal reports. WALL STREET JOURNAL
Deutsche Bank Seeks Changes to Supervisory Board  | Deutsche Bank “is asking investors to replace three nonbankers supervising its executives with finance and legal experts after litigation-related costs eroded profit last year,†Bloomberg News writes. BLOOMBERG NEWS
MetLife to Repatriate Offshore Reinsurance Unit  | The New York Times reports: “MetLife, the nation’s largest life insurer, said Tuesday that it would make its business more transparent by moving some deals for hedging risk back to the United States from offshore, pleasing regulators but underwhelming the stock market.†NEW YORK TIMES
Merck Agrees to Buy Back Shares From Goldman  | Merck agreed to buy about $5 billion worth of shares from Goldman Sachs, Reuters reports. REUTERS
Nomura to Increase Overseas Staff in Fixed-Income  |Â
BLOOMBERG NEWS
Carlyle Seeks $2 Billion for Fund Focused on Japan  | The Carlyle Group is looking to raise 200 billion yen ($2 billion) for a third Japanese fund, “with Japan’s aggressive monetary easing helping to boost investor interest,†Reuters reports, citing unidentified people with direct knowledge of the matter. REUTERS
From a Hedge Fund, Claims Over Libor Manipulation  | Salix Capital, which owns claims from closed hedge funds that once were part of FrontPoint, argues in court documents that the hedge funds’ trading was hurt by banks suppressing Libor, Thomson Reuters News & Insight writes. THOMSON REUTERS
In SAC Case, Prosecutors Said to Consider Using Racketeering Law  | Reuters reports: “U.S. prosecutors are considering charging Steven A. Cohen’s SAC Capital Advisors as a criminal enterprise engaged in a long pattern of insider trading in stocks, according to a person familiar with the matter.†REUTERS
China Galaxy Securities Rises in Trading Debut  | The brokerage firm China Galaxy Securities rose 9.1 percent in its stock market debut on Wednesday in Hong Kong, Bloomberg News reports. BLOOMBERG NEWS
After Tech Industry Lobbying, Immigration Overhaul Moves Forward  | A broad overhaul of the nation’s immigration laws was approved by the Senate Judiciary Committee on Tuesday. NEW YORK TIMES
Despite Stumbles, a Promising Path for Start-Ups in Brazil  | Investors and entrepreneurs say that economic conditions in Brazil are difficult but that long-term prospects remain highly favorable. DealBook »
Brokerage Firm to Pay $7.5 Million Fine to Regulators  | LPL Financial will settle accusations that it made misstatements and failed to supervise its brokers’ communications properly. DealBook »
Irregularities Suspected at Hong Kong Mercantile Exchange  | The Hong Kong securities regulator announced on Tuesday that it had discovered possible financial irregularities at the just-closed Hong Kong Mercantile Exchange and said it referred the matter to the police for investigation. DealBook »
In Europe, a Fed President Urges a Policy of Easing  | In a speech in Frankfurt, James Bullard, president of the Federal Reserve Bank of St. Louis, said the European Central Bank should consider quantitative easing similar to that undertaken by the Federal Reserve, The New York Times reports. NEW YORK TIMES
Wall Street Advocacy Group Turns to Former Lawmakers  | A former banker was successful at the helm of the Securities Industry and Financial Markets Association. But using former politicians to sweet-talk regulators and try to improve the image Main Street has of the industry could be a better strategy, Daniel Indiviglio of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Herbalife Hires PricewaterhouseCoopers as Auditor  | Herbalife has hired PricewaterhouseCoopers as its auditor, replacing KPMG, which had resigned as the company’s auditor after it was revealed that a former partner had leaked secret information about clients to a third party. DealBook »
