Abby Johnson, Larry Fink, and Tim Armour All Walk Into a Bank ...
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Wednesday, February 03, 2016

Abby Johnson, Larry Fink, and Tim Armour All Walk Into a Bank ...

What happens when Abby Johnson, Larry Fink, and Tim Armour walk into Jamie Dimon's bank together with Warren Buffett? The answer: a collective fight against short-sighted investing and business decisions.

Abby Johnson
President, Chief Executive Officer
Stephen Foley and Ben McLannahan of the Financial Times report that in December Dimon and Buffett brought Capital Group's [profile] Armour, BlackRock's [profile] Fink, Fidelity's [profile] Johnson, and others together at J.P. Morgan's headquarters in New York City to "work on a new statement of best practice that would cover the relationship between US companies and their investors." Meanwhile, Fink also sent another letter to big companies' CEOs [BusinessInsider posted the full text of the letter], this time pushing for CEOs, investors, and governments to focus on the the long-term view.

Barron's, Bloomberg, and Reuters reported on Fink's letter.

The FT puts Dimon's December meeting in the context of the ongoing rise of shareholder activism. Indeed, Fink notes in his letter (sent to CEOs of S&P 500 companies) that in the 18 biggest proxy battles in the U.S. last year, BlackRock aligned with activist investors 39 percent of the time (that translates into seven of those 18 times).

This is far from the first time that Fink has used his big microphone, as CEO of the world's largest asset manager, to speak to all the chiefs of the biggest publicly-traded companies.

"Many companies continue to engage in practices that may undermine their ability to invest for the future," Fink writes this time around. "We certainly support returning excess cash to shareholders, but not at the expense of value-creating investment. We continue to urge companies to adopt balanced capital plans, appropriate for their respective industries, that support strategies for long-term growth."

The FT reports that Vanguard has also been involved in Buffett and Dimon's secret meetings. Yet the article does not specifically out Vanguard chief Bill McNabb or any other Vanguard leader as being a part of the most recent meeting, in December.

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