News
Jamie Dimon’s retirement talk puts new spotlight on JPMorgan’s top deputies
Jamie Dimon made it clear last week that he sees the end of his time as head of the largest U.S. bankplacing a new focus on key deputies who are considered the main candidates for their position.
The disclosure took place during JPMorgan Chase (JPM) annual investor day in Manhattan, where bank analysts and followers gathered to hear about plans for the coming year.
Dimon said his timeline for an exit is “no more than five years” and that the succession process is “well underway.”
“There is more of a prospect that in the next three or four years Jamie Dimon will probably become chairman and someone else will become CEO of JPMorgan,” said Wells Fargo analyst Mike Mayo, who asked Dimon for an update on succession during the investor day event.
Jamie Dimon during the final beam laying ceremony for JPMorgan Chase’s new global headquarters building in New York City last November. REUTERS/Brendan McDermid (REUTERS/Reuters)
The CEO’s comments refocused attention on the executives who have the best chances of filling Dimon’s role, and they all gave presentations about their lines of business. Some are in new roles after a management reshuffle in January designed to give candidates a broader range of responsibilities.
Two names keep popping up inside and outside the bank: Marianne Lake and Jennifer Piepszak, each overseeing the two largest parts of the company.
It’s “a two-woman race,” Mayo said.
From the outside, Mayo added, “it looks like a coin toss between the two, making the next few years very important. Will both sides of the company perform well? Will there be an incident?
Marianne Lake, CEO of JPMorgan Chase Consumer and Community Bank (JOE VERICKER PHOTOBUREAU INC)
The two executives share a lot in terms of credentials. Both served as JPMorgan’s chief financial officers, both are in their 50s and have been with the bank longer than Dimon, who joined in 2004.
Until January, both were also responsible for JPMorgan’s sprawling consumer and small business unit, which produces the biggest returns for the bank and oversees everything from checking accounts to credit cards and home equity loans.
Then Piepszak, as part of the management change, became co-CEO of the commercial and investment bank JPMorgan, which acts as a major player on Wall Street. Lake became the sole head of the consumer division.
Jennifer Piepszak, co-CEO of commercial and investment banking at JPMorgan. (JOE VERICKER FOTOBUREAU INC)
Analysts are mostly in agreement about the difficulty JPMorgan’s board will face in trying to fill Dimon’s shoes.
The 68-year-old is the longest-serving CEO of a major bank and the only one left who called the shots during the 2008 financial crisis. Since taking the role in 2006, JPMorgan’s share price has risen to around eight times its initial value.
The “transfer will be complicated no matter what,” said Ebrahim Poonawala, an analyst at Bank of America Securities.
The story continues
The bank already has a plan in case the sudden and unforeseen event happens with Dimon, a contingency mentioned by insiders and even Dimon himself as the “hit by a bus” scenario.
In this case, the role will fall to operations director Daniel Pinto.
“We built in succession with Daniel Pinto. How many companies can say that?” Dimon said last week.
Daniel Pinto, director of operations at JPMorgan. (JPMorgan Chase)
Pinto’s career at the bank dates back to 1983, when he began working in Buenos Aires as a financial analyst and foreign exchange trader for a predecessor company called Fabricantes Hanover.
In 2020, the Argentine executive had the chance to intervene when Dimon suffered a sudden and near-fatal heart injury.
Pinto served as co-CEO for a month along with Gordon Smith, another executive who was once considered a “hit-by-bus” Dimon replacement. Smith retired in 2021.
But even if this scenario were to repeat itself, Pinto would not be expected to remain CEO in the long term.
While Lake and Piepszak are considered frontrunners for the permanent CEO role, the dynamics of the race can always change.
There are a few other relatively young executives who were recently promoted to new roles, including Piepszak’s co-head of commercial and investment banking, Troy Rohrbaugh.
A newer face to outsiders, Rohrbaugh spent nearly two decades at JPMorgan. He came up in the bank’s fixed income trading business after previously working for Goldman Sachs (GS).
Another remote possibility the board might consider is bringing in someone from outside JPMorgan, according to Mayo, especially if JPMorgan continues to put more focus on developing artificial intelligence and other new technologies.
Even with Dimon out of the CEO role, he probably won’t leave the bank entirely. He could remain chairman of the board.
The bank had already indicated that its next CEO will not hold the dual role of chairman of the board, a division that is receiving increasing support from shareholders.
Last week, nearly 43% of JPMorgan shareholders voted in favor of such a deal, up from 37.5% in 2023.
“Am I going to stay as president for a while?” Dimon said last week at investor day “We’ll see.”
David Hollerith is a senior reporter at Yahoo Finance, covering banking, crypto and other areas of finance.
Click here for in-depth analysis of the latest stock market news and events that move stock prices.
Read the latest financial and business news from Yahoo Finance