Dimon’s emergency surgery puts spotlight on JPMorgan’s bench
Jamie Dimon steered JPMorgan Chase through the financial crisis, built it into America’s biggest bank and serves as the industry’s top spokesman.
Now, emergency heart surgery is forcing him to test his lieutenants’ ability to step in — just as the coronavirus creates the most turbulent markets and biggest logistical headaches in years.
The bank’s announcement late Thursday that Daniel Pinto and Gordon Smith will handle Dimon’s responsibilities until he recovers is shining a brighter light on how prepared the next generation is to someday take over permanently. Even with Dimon expected to return, the scare will renew pressure on the board to make sure it has strong options. For now, Pinto and Smith will lean on their two years as co-presidents, which have given them a broader remit beyond the major divisions they run.
“It’s going to be quite a task,” said Louis Tse, managing director at VC Asset Management Ltd. “It’s horrible timing with the virus outbreak. Lots of global economic policies are expected to come out, you have the Fed, the China-U.S. trade war, elections in the U.S.”
While Pinto and Smith are only sitting in for Dimon short-term, the bank has been grooming others who could potentially take over in the future. Management changes last April shifted responsibilities for two of the bank’s top female executives — Marianne Lake and Jennifer Piepszak — to help them gain experience. They’re among the most senior women in banking, an industry that is still dominated by men and keeps pledging to reform.
That pair, both 50, are seen as more likely long-term answers than Smith, 61, or Pinto, 57. Still, Lake and Piepszak are less than a year into their new roles and neither has yet run one of JPMorgan’s four main divisions. Doug Petno, who runs commercial banking, and Mary Erdoes, the asset and wealth management chief, are also among Dimon’s top staff.
Dimon, who’s served as CEO since 2005 and called finding a successor his No. 1 priority a decade ago, has seen several rounds of deputies get tired of waiting for their shot at the top spot. JPMorgan alumni now run major banks including Barclays, Wells Fargo and Standard Chartered.
Still, Dimon has expressed confidence in the current crop, calling the bank’s leaders “the best team on the planet” at the firm’s investor day last week. He’s been known to rotate senior managers among businesses to ensure there is a cast of people equipped to take over the company whenever he steps down.
“JPMorgan has a deep management bench,” Wells Fargo analyst Mike Mayo wrote in a note to clients. “Nonetheless, his industry leadership will be missed during this crisis-like period.”
Here’s a look at who’s on that bench:
Smith runs the consumer bank, which has grown to contribute half of the firm’s revenue and has more employees than any other division. He joined JPMorgan in 2007 from American Express and initially ran the company’s credit-card services business. Smith, who doesn’t enjoy the spotlight like his boss does, has the rare distinction among the bank’s current leaders of having served alongside Dimon through the crisis.
Pinto oversees the corporate and investment bank and has helped JPMorgan surge to the top of Wall Street’s trading and investment-banking ranks. An Argentine, he got his start as a currency trader and has spent his entire 37-year career at JPMorgan and its predecessor firms. He keeps a scorecard in his office that shows how his businesses rank against competitors. He’s known to ferret out areas where the firm’s dealmakers or traders could climb higher, and he has succeeded for the most part in getting them into the top spots.
Lake has been CEO of the consumer lending division since May and oversees businesses that produce about a quarter of the bank’s revenue. Before that she served as chief financial officer for about seven years. When Wells Fargo was looking for a CEO last year, both she and Smith appeared on lists of potential recruits.
Piepszak is the firm’s finance chief and previously led the credit card business for two years. She came up through JPMorgan’s investment banking operations and then jumped to the consumer business in 2010. For several years, Piepszak oversaw financing operations for the mortgage business, steering it through a period in which it faced a host of crisis-era settlements with regulators.