While researching the post I planned to write on JPMorgan Chase CEO Jamie Dimon, I stumbled on this insightful analysis from Fortune’s Amanda Gerut highlighting Dimon’s recent public diss of the diversity, equity, and inclusion initiatives he and his bank once so proudly championed. Reading Gerut’s piece I was surprised to learn that Mellody Hobson not only serves on JPMorgan’s board, but she also figured prominently in Dimon’s initial embrace of diversity.
Dimon now believes that some DEI costs are “stupid” and admitted that JPMorgan likely has also done some things that “became excessive” and wasted money. Dimon’s comments were disrespectful of the diversity efforts of Hobson, one of only two Blacks on JPMorgan’s 11-person board.
Hobson’s day job is serving co-CEO of Chicago-based Ariel Investments, the first Black-owned mutual fund company in the U.S.
Powerful leader
Until recently, I never heard of Hobson, which burst my bubble that I’m reasonably informed about American business and its leaders. Fortune last year ranked Hobson the 73rd most powerful person in business, touting what it implied was her successful DEI advocacy.
“At a time when many U.S. companies are turning away from DEI efforts owing to the political climate, Mellody Hobson remains committed to opening doors for others—and ensuring that corporate America is still practicing what it preaches,” Fortune said.
CNBC anchor Andrew Ross Sorkin said on a recent broadcast that Hobson is “arguably the most powerful Black woman in all of finance.”
Hobson, who is married to acclaimed Hollywood writer, director, and philanthropist George Lucas and has a small interest in the Denver Broncos NFL football team, until recently was board chair of troubled Starbucks. She was elected a director more than 20 years ago when the once purveyor of premium coffee drinks was a widely admired and respected global brand.
Hobson takes credit for luring Brian Niccol from Chipotle and potentially paying him a gargantuan $113.2 million to reverse Starbucks’ declining sales from the comfort of a satellite Southern California office more than 1,000 miles south of Starbucks’ Seattle headquarters.
I’ve railed about Niccol’s contract and so far I’m underwhelmed by his initiatives. Niccol says he wants to return the Starbucks to its folksy roots when baristas scribbled customers’ names on the backs of cups and reintroduce a condiment bar. He also must deal with a pesky lawsuit filed by Missouri attorney general Andrew Bailey last week alleging that Starbucks engaged in race and sex-based discrimination linking executive compensations to racial and gender quotas.
The policies Bailey alleges were illegal began in 2020 when Hobson was Starbucks’ vice chair and continued in the subsequent three years she served as chair and became the first Black woman to lead the board of a Fortune 500 company. Among the many damning and controversial allegations in Bailey’s lawsuit are that Starbucks’ director nominations were racially, and gender based.
Hobson likely knew that Bailey’s lawsuit was pending, and perhaps unrelatedly, last month she disclosed she wouldn’t stand for reelection. Florida Attorney General Ashley Moody last year disclosed her office was investigating Starbucks’ DEI practices, so possibly there’s still another legal shoe to drop.
Bend-a-knee Jamie
For those with short memories, Dimon was the CEO who at the height of the Black Lives Movement’s popularity was photographed taking a knee in front of one of Chase’s suburban New York City branches.
Charlie Gasparino, author of Go Woke, Go Broke about the radicalization of corporate America, said a company spokesperson told him that Dimon took a knee to fit into the photo. If you believe that, you probably believed that Joe Biden was fit as fiddle when he was president, as Kamala Harris and other Democratic leaders assured Americans.
Even before Donald Trump’s election, the DEI winds had begun losing much of their force. These days, CEOs are falling all over themselves disavowing the diversity ideals they previously claimed were nearest and dearest to their cash padded hearts. Their PR minions are doing Orwell proud scrubbing all previous published references trumpeting DEI goals and objectives.
Gasparino’s book has many great insights, but my favorite is his dismissal of CEOs as cowards. While the corporate media portrays leaders of publicly traded corporations as being tough-minded individuals singularly focused on advancing the interests of their companies, the truth is many, if not most, are more interested in advancing and enriching themselves, which is how they got to occupy their corner offices to begin with.
The Biden Administration demanded, and the corporate media wholeheartedly supported, diversity mandates. Corporations, rife with newly appointed DEI directors, began tying CEO compensations to the diversity report card rankings of an organization overseen by a former Obama aide called the Human Rights Campaign, whose corporate terrorism and close links to the Democratic party I’ve previously profiled. The corporate media has yet to report that HRC recently was forced to fire 20 percent of its staff.
Gasparino has written favorably about Dimon, and he knows the guy, so perhaps the praise is deserving. I don’t perceive Dimon favorably; for all his supposed banking brilliance, a woman named Charlie Javice when she was in her 20s allegedly duped Dimon’s M&A folks and convinced them that her college financial planning platform had more customers than it did.
It’s telling that the Justice Department and SEC are both pursuing legal actions against Javice, but let JPMorgan off with a $920 million wrist slap for “tens of thousands” of episodes of unlawful trading in the markets for precious metals futures contracts and “thousands” of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
Suffice to say, Dimon’s disparagement of his DEI programs reaffirmed my negative views of America’s most powerful banker. For the record, I’ve long been critical about DEI programs, as I have with so-called socially responsible investing, but I spoke out six years ago when it was considered blasphemous to do so.
Maybe JPMorgan should retain me for my wisdom. I come a lot to cheaper than the $39 million the bank paid Dimon last year.
As reported by Bloomberg, Dimon recently trashed some of his bank’s DEI-related spending choices, without going into specifics.
“I saw how we were spending money on some of this stupid sh-t, and it really pissed me off,” Dimon said, according to a recording of the townhall heard by Bloomberg News. “I’m just gonna cancel them. I don’t like wasted money in bureaucracy.”
Dimon was a diversity advocate even before George Floyd was brutally killed by police while resisting arrest. In 2019, Dimon and Hobson penned a commentary for CNN advocating that if companies achieved more employee diversity, it would narrow America’s racial wealth gap.
Dimon and Hobson cited a Boston Consulting Group study purportedly documenting that businesses with diverse leadership generate 19% more revenue than non-diverse companies. Not surprisingly, among BCG’s specialties is “helping clients build the equitable and inclusive businesses of the future.”
BCG possibly has difficulty practicing what it preaches. An unidentified Black woman partner last month sued BCG alleging she was wrongfully fired in retaliation for her gender, pregnancy, and advocacy for diversity and inclusion.
JPMorgan’s Diversity Initiatives
JPMorgan was all in on Dimon’s and Hobson’s messaging.
In 2021, JPMorgan Chase launched a training program for all employees called “You Belong Here: Building a More Inclusive JPMC.” The bank pledged to investors that it enhanced its listening strategies and devised a system for holding senior managers accountable for strengthening its approach to company-wide DEI priorities.
“As part of the firm’s Path Forward commitment, we established an executive accountability framework that strengthens the way the firm incorporates diversity, equity and inclusion priorities and progress into year-end performance evaluations and compensation decisions for (operating committee) members and their direct reports,” JPMorgan told investors.
Missouri DEI lawsuit
As one would expect from the AG of the “Show-Me State”, Andrew Bailey’s 59-page lawsuit is chock full of damning allegations. He alleges that one of Starbucks’ “goals” was to have “[a]t least 40% BIPOC (Black, Indigenous, and People of Color) representation and 55% women in all U.S. retail roles by 2025. Another goal was to have “[a]t least 30% BIPOC representation and 50% women for all U.S. enterprise roles, including senior leadership, by 2025.”
A third goal was to have “[a]t least 40% BIPOC representation and 30% women in all U.S. manufacturing roles by 2025.
Bailey alleges that Starbucks’ executives were partly compensated on their diversity achievements. He goes so far as to allege that the long lines at Starbucks that have alienated customers and sparked a reduction in sales are the result of the company’s “illegal” diversity initiatives resulting in the hiring of employees who “made more mistakes” on the job.
“Missouri’s consumers are required to pay higher prices and wait longer for goods and services that could be provided for less had Starbucks employed the most qualified workers,” regardless of their race, gender or national origin, the lawsuit says.
It’s noteworthy that despite Starbucks’ allegedly BIPOC goals and objectives, Hobson chose to hire Niccol, who is lily white. He, in turn, moved to quickly hire Taco Bell vets Mike Grams and Meredith Sandland, who are also lily white, live in Southern California, and I’d wager also won’t be relocating to Seattle.
Regardless of the merits of Bailey’s lawsuit, it’s undeniable that during the three years that Hobson served as chair of Starbucks’ board, the coffee company’s reputation and sales declined, undermining her argument that DEI initiatives lead to more customers and increased revenues. Indeed, in the years I frequented the Starbucks daily in my West LA neighborhood, I rarely saw a Black person in any of the company’s stores.
Perhaps Blacks admirably are less willing than white persons to waste their time waiting for lousy, overpriced coffee frequently served by baristas with bad attitudes.