Resolved:
Shareholders request that the Board of Directors undertake a review and institute policy changes, including amending the bylaws and any other actions needed, to minimize the indemnification of directors for civil, criminal, administrative or investigative claims, actions, suits or proceedings, to the fullest extent permissible under the General Corporation Law of the State of Delaware and other applicable laws. Such policies and amendments should be made effective prospectively only, so that they apply to any claims, actions, suits or proceedings for which the underlying activities occur and the claims are asserted subsequent to both the enactment of the policy changes and the renewal of the director’s board membership and contract.
Supporting Statement:
The proponent is convinced that JP Morgan Chase’s policy of maximum indemnification of directors — even for some illicit or illegal activities that may violate their duties as fiduciaries — provides excessive shelter of directors.
Our bank received almost $79 billion in taxpayer funds in 2008. Our company has reportedly settled a class action lawsuit alleging violation of the Servicemembers Civil Relief Act, which provides mortgage interest rate relief for servicemen on active duty and for a year after discharge. In the settlement, our company paid $60.4 million to service members and their families. Our company also had to reverse at least 10 of 18 wrongful foreclosures of military family homes.(Top Class Actions, 4/26/11) If you believe that our company acted appropriately, the proponent does not expect you to support this resolution.
As of the filing date of this resolution, our company was still negotiating a multibillion dollar settlement with a coalition of state attorneys general intended to hold our bank “accountable for illegal practices [such as “robo-signing”] that have thrown millions of Americans out of their homes and left others owing more than their homes are worth.”(SF Gate, 11/13/11)
In November 2009, JPMorgan Chase & Co. agreed to a $722 million settlement with the U.S. Securities and Exchange Commission to end a probe into sales of derivatives that helped push Alabama’s most populous county into bankruptcy. The SEC alleged that our company, which had been chosen by the county commissioners to underwrite floating-rate sewer bonds and provide interest-rate swaps, had made bribes in exchange for the underwriting agreements. Our company then allegedly made up for the costs of paying bribes by charging higher interest rates on the swaps. (Bloomberg, 11/4/09)
Our company is clearly in need of improved governance and internal accountability. The proponent’s intention is to protect shareowner value by incentivizing company directors to exercise maximum fiduciary oversight of the corporation.