One of the most perilous positions in banking is as possible successor to Jamie Dimon. So, Marianne Lake and Jennifer Piepszak have already demonstrated their bravery in accepting a role previously filled by a string of highly regarded and long-serving JPMorgan executives who never managed that final step.
Think of Bill Winters, ousted in 2009 and now chief executive of Standard Chartered; Charlie Scharf, who worked for Dimon for 25 years from the early days at Commercial Credit but left JPMorgan in 2012 and now heads Wells Fargo; Jes Staley, who quit in 2013, already eight years into Dimon’s tenure, now chief executive of Barclays; and Michael Cavanagh who departed a year later for Carlyle and is now CFO of Comcast. There are many others.
Successors
Lake, former chief financial officer and most recently chief executive of consumer lending, has been talked of as a potential chief executive at the largest US bank since 2014. So, she has presumably learned to live with the pressure.
Though now being asked to co-head all of JPMorgan’s consumer and community banking businesses, which brought in $50 billion of revenue last year, along with Piepszak, who succeeded Lake as chief financial officer two years ago, takes this to a whole new level.
The two women must work together as co-heads of the division thanks to Gordon Smith, its present chief executive, surprising Dimon with his decision to retire at the end of this year when he will be 62. He is three years younger than his boss.
Smith himself was officially designated a potential successor in January 2018, when Dimon promoted him and Daniel Pinto, chief executive of the corporate and investment bank, to be co-presidents and co-chief operating officers of JPMorgan Chase.
JPMorgan is now once again putting out the message that Dimon will stay on for a number of years yet
Three and a half years ago, Dimon said that he and the board had agreed he would stay on for another five years. Dimon endured heart surgery in 2020. Smith and Pinto stepped up in his absence and jointly managed the bank through the early phase of Covid.
JPMorgan is now once again putting out the message that Dimon will stay on for a number of years yet. Presumably, Pinto, aged 57, would step up in an emergency while Lake and Piepszak, aged 51, are the next generation.
Dimon became chairman and chief executive when he was 50.
That was 15 years ago. At least if they don’t make it, Lake and Piepszak may look at previous candidates to take over from Jamie and think they each stand a good chance of becoming chief executive at another bank.
Continuity
That probably won’t be Morgan Stanley though.
Continuity is likely to be the watchword for whoever takes over from James Gorman, just as for whoever succeeds Dimon. Both will be tough acts to follow but, for now at least, both banks look well set.
Boards look for outside candidates when they need a turnaround after poor performance or a change of strategy.
Morgan Stanley has drawn criticism for an all-male list of contenders. But these are the people who run its businesses. Promoting gender balance and diversity has to start much earlier and lower down the ranks.
Like Dimon, Gorman may be around for a while yet.
Promoting gender balance and diversity has to start much earlier and lower down the ranks
The succession question is fascinating though. It asks whether Morgan Stanley is still at heart a top-two global investment bank with a large wealth management franchise providing ballast or is it now a leading wealth manager that happens to have a rather good investment bank attached?
Making Ted Pick, who heads the institutional securities business, and Andy Saperstein, head of wealth management (now also including E*Trade and Morgan Stanley at Work), both co-presidents simply acknowledges this question and leaves it to run.
His troops may think that also being named co-head of firm strategy and execution and put in charge of the firm’s international operations makes Pick marginally the first choice.
Time will tell.
Modern management
Within large, complex financial services groups, it can be hard to find potential chief executives with experience across many different divisions. It is a specialist career. Shareholders would be taken aback if Gorman asked Pick and Saperstein to swap jobs, though maybe he should.
When Euromoney spoke to former Citigroup chief executive Mike Corbat in the run-up to the anointment of Jane Fraser to take over from him, he contrasted the old world of battlefield promotions – when the best trader was tapped on the shoulder and told his new job was to manage all the other traders – and modern management training.
“When I think of our leaders of today and tomorrow, their career will not be a straight ladder up the ranks of seniority, it will be more like a jungle gym, with a series of experiences that will be curated by the company.”
Lake started at JPMorgan in London as chief financial officer of the credit trading business, was later global controller for the investment bank and was chief financial officer for consumer and community banking, the business she now co-heads, before spending six years as group CFO.
Piepszak similarly has held control and finance positions on both the corporate and investment banking side and on the retail side of JPMorgan, and has previously been chief executive of card services and business banking.
They’ve been swinging around the jungle gym for 20 years already.
