By Emily Glazer
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 30, 2018).
JPMorgan Chase & Co. elevated two executives to share the
No. 2 post at the nation's largest bank, the clearest step yet to
designate a potential successor to Chairman and Chief Executive
James Dimon.
The bank's corporate and investment banking chief, Daniel Pinto,
and the head of its consumer businesses, Gordon Smith, will share
the title of president and chief operating officer, vaulting them
above a handful of rival leaders at the New York bank.
The bank wanted to reward Mr. Pinto, 55, and Mr. Smith, 59,
while offering investors and other stakeholders greater clarity on
who could eventually supplant Mr. Dimon, said a person familiar
with the bank. Mr. Dimon is perhaps the highest-profile executive
on Wall Street and one of the most visible CEOs in the world.
Yet the identity of the next chief executive at JPMorgan remains
unsettled. The company has seen a number of top aides of Mr. Dimon
leave in recent years and Mr. Dimon, 61 years old, said in a
statement that he doesn't plan to hand over control for
"approximately five more years."
Over that span, said a person familiar with the bank, at least
three other senior executives will compete to earn a shot at
following Mr. Dimon if he stays as long as currently expected. In
the announcement, Mr. Dimon mentioned chief financial officer
Marianne Lake, 48; commercial bank chief Doug Petno, 52; and asset
and wealth management chief Mary Callahan Erdoes, 50, as taking on
expanded roles at the bank. They are all younger than Messrs. Pinto
and Smith, each of whom would be in his 60s should Mr. Dimon stay
another five years.
"Under all timing scenarios, whether today or in the future, the
company has several highly capable successors in place," JPMorgan
said in a statement Monday.
The promotions of Messrs. Pinto and Smith will add to their
current roles. The responsibilities of the rest of the bank's
operating committee of roughly a dozen top executives "will remain
unchanged" with executives continuing to report to Mr. Dimon.
Mr. Dimon, widely viewed as a statesman for the banking
industry, had told people within the bank for years that he planned
to stay in his role for another five years. Some have noted that
the number has stayed at five even as the years pass.
For years, Mr. Smith was viewed as the executive who would
replace Mr. Dimon if an unexpected event occurred that precluded
Mr. Dimon from continuing. He is the oldest business unit head and
a trusted confidante of Mr. Dimon, executives said.
Mr. Smith leads the retail-banking, mortgage and credit-card
divisions of the bank, and other parts of the bank related to
consumers and under the Chase umbrella. That amounts to overseeing
140,000 of the bank's roughly 250,000 employees, 61 million
households and four million small businesses. He joined Chase in
2007 after serving in several roles at American Express.
A key part of his role is continuing is making sure the consumer
bank stays ahead of mobile-banking trends and nimble fintech
competitors.
Mr. Pinto has spent his entire 35-year banking career at
JPMorgan and has run the corporate and investment bank for the past
five years. That unit includes investment banking, trading and
treasury services -- businesses that lead the industry in market
share and revenues.
Mr. Pinto is focused on maintaining the bank's market share in
key businesses and preparing for any major changes related to
Brexit, among other international matters.
With a softening regulatory environment, both executives are
preparing for possible expansion: the bank announced it will build
up to 400 new branches in new markets across the U.S. and Mr. Dimon
said recently the bank is looking into expanding further into
Africa.
Executives said Messrs. Pinto and Smith have gotten along for
years though they worked in nearly opposite parts of the bank. That
business gap changed in 2017, when the two executives also assumed
responsibility for firmwide technology at JPMorgan after now-former
COO Matthew Zames left the firm.
A new round of speculation about succession emerged in June when
former Mr. Zames left the bank. Chief executives that once
counseled Mr. Dimon but later left include Charles Scharf of Bank
of New York Mellon Corp., Jes Staley of Barclays PLC, Bill Winters
of Standard Chartered PLC and Frank Bisignano of First Data
Corp.
JPMorgan isn't alone in naming two possible near-term successors
to the top boss. Goldman Sachs Group Inc. made a similar move in
December 2016 after CEO Lloyd Blankfein's No. 2 executive Gary Cohn
left to join the Trump administration. Goldman Sachs then named
David Solomon and Harvey Schwartz as co-presidents and co-chief
operating officers.
Mr. Dimon has enjoyed a nearly unparalleled level of job
security among CEOs of large banks. He joined JPMorgan when the New
York bank bought Bank One Corp. in 2004, and became CEO in 2005. He
navigated the bank through the financial crisis was successfully
treated after being diagnosed with throat cancer in 2014.
In more recent years, after the bank got through a bevy of large
fines related to the mortgage bust, Mr. Dimon has become more
outspoken about policy issues ranging from the state of the U.S.
economy, banking regulations and strategies to boost growth.
JPMorgan and other banks are eager to push for higher profits
against a backdrop of rising interest rates, falling taxes and an
easing regulatory burden. One risk is that JPMorgan could suffer
defections by senior executives who see the announcement as more
clarity that they won't run the bank, at least soon.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
January 30, 2018 02:47 ET (07:47 GMT)
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