JPMorgan’s reshuffle of senior managers in May drew attention for the appointment of Marianne Lake and Jennifer Piepszak as co-heads of consumer banking and the planned elevation of Daniel Pinto to sole president.
That positions Lake and Piepszak as joint top long-term contenders for Jamie Dimon’s job running the biggest US bank, while Pinto would take over if Dimon was forced to retire in the near term.
Pinto carried out this role in tandem with Gordon Smith – who is retiring later this year – when Dimon took time off for heart surgery in 2020; and Lake and Piepszak were both already viewed as contenders for the top job, so the announcement was not much of a surprise.
The elevation of Jeremy Barnum to succeed Piepszak as chief financial officer was less predictable. He has a more chequered past than most Wall Street CFOs and is not expected to take the title of potential candidate for chief executive that has been awarded to the two most recent finance heads.
Barnum has even been fired by JPMorgan, leaving his role as head of credit default swaps and co-head of North American credit trading in 2004 after losses of around $200 million contributed to trading results that were described at the time by Dimon (who was about to succeed Bill Harrison as chief executive) as “terrible”.
In retrospect Barnum’s credit derivative loss was a minor blemish compared to the London Whale $6.2 billion default swap hit that JPMorgan suffered in 2012.
But his next job as head of the London office of hedge fund BlueMountain also ended after credit trading losses in 2006, as a position in Liberty Cablecom default swaps unravelled when the company made an unexpected bond issue.
The elevation of Jeremy Barnum to succeed Piepszak as chief financial officer was less predictable
Barnum was able to turn these two trading strikes to his advantage, however, and since rejoining JPMorgan in 2007 his focus has been on managing risk, not trying to exploit it for trading profits.
He was CFO of JPMorgan’s corporate and investment banking division from 2013 until the beginning of this year, a period in which the group – under Daniel Pinto – has become the clear global market leader.
JPMorgan’s second quarter results will be announced on July 13 and the related earnings call will give the wider world a chance to make its judgement on Barnum’s accent – which has caused considerable confusion through the years about whether he is American or English (he’s American).
‘Extraordinary talent’
Barnum’s higher profile as CFO of JPMorgan may also prompt renewed interest in the writing of his wife Caitlin Macy, whose most recent novel ‘Mrs’ is set “in the well-heeled milieu of New York’s Upper East side” during the 2008 financial crisis and drew comparisons with Tom Wolfe’s ‘The Bonfire of the Vanities’.
Dimon was effusive in his own blurb for Barnum in a statement announcing his executive changes on May 18. After saying that JPMorgan was fortunate to have two superb executives in Lake and Piepszak running its $50 billion consumer banking group, Dimon added: “We are also lucky to have another extraordinary talent, Jeremy Barnum, become our CFO. His breadth of experience within our complex, global CIB positions him well for this critical firm-wide role. In addition, he is recognized within our company and in the financial and regulatory communities for his deep intellect and integrity.”
Dimon has a track record of lining up potential successors only to later find some fault that leads to their departure from JPMorgan.
The current consensus is that Dimon is finally entering the end period of his long tenure running the bank and that Lake and Piepszak really are genuine contenders for his job.
And Barnum would be a long shot for a further promotion from his new job as chief financial officer. But his career has already had plenty of plot twists, so nothing can be ruled out.
