Get Ready for Another Round of Jamie Dimon vs Mike Mayo
As if the J.P. Morgan JPM +1.28% annual meeting needed any more drama, add one dose of Mike Mayo to the agenda.
- Mike Mayo in 2010
- Associated Press
Mayo has had plenty of questions for other banking executives this year, including dominating Morgan Stanley's MS -0.42% meeting.
J.P. Morgan was kind enough to put on a bright face and tell WSJ it was “pleased” Mayo would be there Tuesday, but the two haven’t always been too nice to each other.
Mayo and J.P. Morgan Chairman and CEO Jamie Dimon have sparred publicly in the past.(Though Mayo has never been so offended as to write about his personal issues with J.P. Morgan, as he has done with Citigroup C +0.08% and Bank of America BAC -0.77%).
Last year, Dimon refuted Mayo’s claims that year that the bank was underperforming because it was too large and would be better off split up.
“I guess that’s a valid question, we should look at it,” Dimon said. “But I can’t imagine that the units of this company would perform better if they were parts of a much smaller company.”
And Dimon wasn’t the only J.P Morgan executive to take issue with Mayo at that meeting. Todd Maclin, then head of retail banking, criticized Mayo’s research as Mayo was questioning whether the bank’s branch expansion strategy was correct. The bank was planning on building thousands of branches and Mayo said “even my young kids know we have too many branches around here.” Maclin called Mayo’s facts “distorted.”
The verbal jabs between Dimon and Mayo go back far.
In 2004, when J.P. Morgan bought Bank One, and thereby Dimon, the executive took a swing at Mayo. Mayo, who recalled the incident in his book titled “Exile on Wall Street,” said Dimon “sucker punched” him when he told to a room that Mayo should title a note “I was wrong” since he’d been negative on J.P. Morgan.
Mayo has not exactly been innocent since the London Whale trading losses. He questioned Dimon the night the losses were revealed about what he should have been watching more closely. (“Newspapers,” Dimon retorted.) Mayo has also questioned the risk management since, put the bank in “the penalty box” and cut his rating on the stock to underperform. He’s the only analyst with a sell-equivalent rating on the bank. Only seven of 35 analysts don’t rate J.P. Morgan a buy, according to FactSet.
Most recently, a comment from Dimon in February caught much attention.
At the bank’s analyst day this year, Mayo asked Dimon about the bank’s capital ratio. Mayo noted that UBS UBSN.VX +0.11% was aiming to have a higher capital ratio to offset any major losses, and that could make some customers feel safer at UBS than J.P. Morgan.
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