This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 30, 2018).
JPMorgan Chase & Co. elevated two executives to share the No. 2 post at the nation's largest bank, the clearest step yet to designate a potential successor to Chairman and Chief Executive James Dimon.
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The bank's corporate and investment banking chief, Daniel Pinto, and the head of its consumer businesses, Gordon Smith, will share the title of president and chief operating officer, vaulting them above a handful of rival leaders at the New York bank.
The bank wanted to reward Mr. Pinto, 55, and Mr. Smith, 59, while offering investors and other stakeholders greater clarity on who could eventually supplant Mr. Dimon, said a person familiar with the bank. Mr. Dimon is perhaps the highest-profile executive on Wall Street and one of the most visible CEOs in the world.
Yet the identity of the next chief executive at JPMorgan remains unsettled. The company has seen a number of top aides of Mr. Dimon leave in recent years and Mr. Dimon, 61 years old, said in a statement that he doesn't plan to hand over control for "approximately five more years."
Over that span, said a person familiar with the bank, at least three other senior executives will compete to earn a shot at following Mr. Dimon if he stays as long as currently expected. In the announcement, Mr. Dimon mentioned chief financial officer Marianne Lake, 48; commercial bank chief Doug Petno, 52; and asset and wealth management chief Mary Callahan Erdoes, 50, as taking on expanded roles at the bank. They are all younger than Messrs. Pinto and Smith, each of whom would be in his 60s should Mr. Dimon stay another five years.
"Under all timing scenarios, whether today or in the future, the company has several highly capable successors in place," JPMorgan said in a statement Monday.
The promotions of Messrs. Pinto and Smith will add to their current roles. The responsibilities of the rest of the bank's operating committee of roughly a dozen top executives "will remain unchanged" with executives continuing to report to Mr. Dimon.
Mr. Dimon, widely viewed as a statesman for the banking industry, had told people within the bank for years that he planned to stay in his role for another five years. Some have noted that the number has stayed at five even as the years pass.
For years, Mr. Smith was viewed as the executive who would replace Mr. Dimon if an unexpected event occurred that precluded Mr. Dimon from continuing. He is the oldest business unit head and a trusted confidante of Mr. Dimon, executives said.
Mr. Smith leads the retail-banking, mortgage and credit-card divisions of the bank, and other parts of the bank related to consumers and under the Chase umbrella. That amounts to overseeing 140,000 of the bank's roughly 250,000 employees, 61 million households and four million small businesses. He joined Chase in 2007 after serving in several roles at American Express.
A key part of his role is continuing is making sure the consumer bank stays ahead of mobile-banking trends and nimble fintech competitors.
Mr. Pinto has spent his entire 35-year banking career at JPMorgan and has run the corporate and investment bank for the past five years. That unit includes investment banking, trading and treasury services -- businesses that lead the industry in market share and revenues.
Mr. Pinto is focused on maintaining the bank's market share in key businesses and preparing for any major changes related to Brexit, among other international matters.
With a softening regulatory environment, both executives are preparing for possible expansion: the bank announced it will build up to 400 new branches in new markets across the U.S. and Mr. Dimon said recently the bank is looking into expanding further into Africa.
Executives said Messrs. Pinto and Smith have gotten along for years though they worked in nearly opposite parts of the bank. That business gap changed in 2017, when the two executives also assumed responsibility for firmwide technology at JPMorgan after now-former COO Matthew Zames left the firm.
A new round of speculation about succession emerged in June when former Mr. Zames left the bank. Chief executives that once counseled Mr. Dimon but later left include Charles Scharf of Bank of New York Mellon Corp., Jes Staley of Barclays PLC, Bill Winters of Standard Chartered PLC and Frank Bisignano of First Data Corp.
JPMorgan isn't alone in naming two possible near-term successors to the top boss. Goldman Sachs Group Inc. made a similar move in December 2016 after CEO Lloyd Blankfein's No. 2 executive Gary Cohn left to join the Trump administration. Goldman Sachs then named David Solomon and Harvey Schwartz as co-presidents and co-chief operating officers.
Mr. Dimon has enjoyed a nearly unparalleled level of job security among CEOs of large banks. He joined JPMorgan when the New York bank bought Bank One Corp. in 2004, and became CEO in 2005. He navigated the bank through the financial crisis was successfully treated after being diagnosed with throat cancer in 2014.
In more recent years, after the bank got through a bevy of large fines related to the mortgage bust, Mr. Dimon has become more outspoken about policy issues ranging from the state of the U.S. economy, banking regulations and strategies to boost growth.
JPMorgan and other banks are eager to push for higher profits against a backdrop of rising interest rates, falling taxes and an easing regulatory burden. One risk is that JPMorgan could suffer defections by senior executives who see the announcement as more clarity that they won't run the bank, at least soon.
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(END) Dow Jones Newswires
January 30, 2018 02:47 ET (07:47 GMT)
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