JPMorgan succession race gives Spinal Tap vibes
BREAKINGVIEWS-JPMorgan succession race gives Spinal Tap vibes The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jeffrey Goldfarb
NEW YORK, June 26 (Reuters Breakingviews) - The law of averages says one of Jamie Dimon’s many potential successors will, eventually, survive the label. With a rate of mysterious disappearances rivaling that of Spinal Tap drummers, being anointed the frontrunner as JPMorgan's JPM.N next CEO has been more like a curse. Doug Petno and Troy Rohrbaugh are the latest candidates, after they were promoted on Thursday to be co-presidents of the mega-bank. The parade of eligible executives, including the departing Marianne Lake, is becoming as farcical as the mockumentary band.
Dimon is by no means under pressure to leave. During his two decades at the helm, JPMorgan's share price has soared more than 700%, outpacing peers and the broader S&P 500 Index. Along the way, he more than tripled the balance sheet to $4.9 trillion, from $1.2 trillion; guided the Wall Street powerhouse through crises both economy-wide and parochial; and became the industry’s self-appointed elder statesman.
His reluctance to call it a career, however, makes as much a mockery of corporate governance standards as JPMorgan Kremlinologists. Years of management shakeups, often to give lieutenants broader experience across the sprawling institution or to replace ones poached by rivals, have left shareholders, employees, rivals, clients, regulators, analysts and journalists speculating about whether the boss was finally ready for a handover, and to whom.
Although JPMorgan might reject the idea that some senior alums were ever heirs to the throne, their high-profile roles made them look like logical contenders. Frank Bisignano, Mike Cavanagh, Mary Erdoes, Heidi Miller, Jennifer Piepszak, Daniel Pinto, Charlie Scharf, Gordon Smith, Jes Staley, Bill Winters and Matt Zames are among those once seen to be on the shortlist, for better or worse, who decamped to run other companies, retired or are simply no longer in the frame.
This protracted corporate saga means there’s really no telling whether Petno or Rohrbaugh will move into the corner suite or down the street to a competitor. The longer Dimon stays, however, the greater the chances are that he stumbles or misses a chance to go out on top.
He oversees the most complex lender in the world, as judged by the Bank for International Settlements, leaving myriad nooks in which problems can lurk. Moreover, his tenure is already nearly triple that of the typical Fortune 500 CEO, according to executive recruitment firm Spencer Stuart. Long-serving leaders tempt a similar fate as aging rock stars: insulated from reality, overconfident, apathetic to the cost of losing talented bandmates. Dimon may yet prove an exception, but the stakes, like Spinal Tap's amplifier, go to 11.
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CONTEXT NEWS
JPMorgan said on June 25 that Doug Petno and Troy Rohrbaugh, co-CEOs of the commercial and investment bank, had been promoted to be co-presidents of the company, effective immediately. Petno also will become sole CEO of the commercial and investment bank, while Rohrbaugh will replace Marianne Lake to run the consumer and community banking division.
Lake decided to retire after more than 25 years of service, JPMorgan said.
(Editing by Jonathan Guilford; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on GOLDFARB/jeffrey.goldfarb@thomsonreuters.com))