Verne G. Istock said Tuesday that he would retire as president and director of Bank One Corp. at the end of next month, ending a nearly six-month transition that began when James Dimon was hired to run the company this year.
The company also unveiled an anticipated streamlining of its board. Five outside directors said they would resign next month.
Mr. Istock, 59, has been associated with the Chicago banking company and its predecessors for 37 years but has grown increasingly isolated within the executive suites. He stepped in as interim chief executive in December, after the abrupt resignation of John B. McCoy, but failed to keep the top spot after a three-month search for a permanent chief.
Instead the job went to Mr. Dimon, 44, the former Citigroup Inc. president, who set out to transform the company's management, dramatically cut expenses and jump-start profits. Mr. Dimon has hired several senior executives from outside the company - especially from Citi. Last month he announced a sweeping $3.8 billion restructuring, much of it recorded in the second quarter.
Mr. Dimon also conducted a "strategic review" of the company's governance. The review concluded Tuesday with the announcement that five directors would resign, leaving a board composed of 13 members. Three of those resigning were board members of the old Bank One.
"A smaller board would be more nimble and effective for Bank One shareholders," Mr. Dimon said.
Analysts said Mr. Istock's continued presence at the company was distracting and a source of constant speculation as to how the new management was fitting in.
Throughout the changes Mr. Istock stayed on, in what many considered to be an unusual arrangement. He agreed in March to assume a largely undefined role as president. All of the executives who once reported to him were reassigned to report to Mr. Dimon.
Though the situation may have been tense inside the corporate offices, Mr. Dimon and Mr. Istock worked hard to put on a cordial public display. Indeed, Mr. Dimon has praised Mr. Istock's contributions through the transition, which included introductions to executives and customers.
"With Jamie's organization, initiatives, and objectives now firmly in place, it's an appropriate time for me to move on," Mr. Istock said in a press statement.
Bradley Vander Ploeg, an analyst at First Union Securities, said the departure of Mr. Istock means Bank One employees can "get the changes behind them and turn their attention to execution."
Mr. Istock joined National Bank of Detroit in 1963 as a credit analyst trainee and rose through the corporate banking ranks to become chairman of NBD Bancorp in 1994. He engineered the company's 1995 merger with First Chicago Corp., acting first as president and chief executive of the combined company and then chairman. In 1998 he forged a deal to merge First Chicago NBD Corp. with Columbus, Ohio-based Bank One.
The directors who are resigning are Seigfried Buschmann 63, of Budd Corp.; Bennett Dorrance, 54, of DMB Associates Inc.; Thomas E. Reilly Jr., 60, of Reilly Industries; Thekla R. Shackelford, 65, a consultant; and Alex Shumate, 50, of Squire, Sanders & Dempsey LLP.