J.P. Morgan COO Matthew Zames Leaving Bank -- 3rd Update
J.P. Morgan Chase & Co. said Thursday that Matthew Zames, its chief operating officer who was once seen as a possible successor to Chief Executive James Dimon, is leaving the bank.
Executives on the bank's operating committee will take on his responsibilities, a spokesman said.
Mr. Dimon sent a memo to employees detailing Mr. Zames's decision to leave the bank after 13 years, which was reviewed by The Wall Street Journal.
Mr. Zames oversaw a number of groups across the bank including cybersecurity, technology, real estate and other functions. Earlier, he held roles across the investment banking and trading businesses and also led the restructuring of the bank's chief investment office following the "London Whale" trading fiasco.
Mr. Zames's departure came after he sought to lead a business unit within the bank, according to a person familiar with the matter. His effort was unsuccessful because there wasn't expected movement among top J.P. Morgan executives, the person added.
While Mr. Zames had once been seen as being in the running to be a succession candidate to Mr. Dimon, his star had dimmed in recent years. What's more, Mr. Dimon has shown no indication of planning anytime soon to relinquish the role he has held for more than a decade.
According to Mr. Dimon's memo, the chief investment office and treasury division, led by John Horner, will report to Chief Financial Officer Marianne Lake.
The global technology group, lead by Dana Deasy, will report to corporate and investment bank head Daniel Pinto and consumer banking head Gordon Smith, according to the memo.
The COO's global operations unit, as well as global investigations, military affairs and other general services, overseen by David Owen, will report to asset management chief Mary Callahan Erdoes and commercial banking chief Doug Petno, according to the memo.
Corporate strategy, led by Patrik Ringstroem, and private investments, led by Rick Smith, will both report to Mr. Dimon, according to the memo.
Mr. Zames is expected to stay at the bank for a few more weeks as his responsibilities transition to other executives, according to the memo.
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Matthew Zames, the chief operating officer at J.P. Morgan Chase & Co. once thought to be a possible successor to Chief Executive James Dimon, is leaving the firm, the bank said Thursday.
The departure of Mr. Zames, 46, will kick off a new round of speculation within the bank about possible heirs to Mr. Dimon. But it will also reinforce views the longstanding chief of the biggest U.S. bank by assets isn't going anywhere soon.
Mr. Dimon, widely viewed as the most powerful executive on Wall Street and a statesman for the banking industry, has told people within the bank that he plans to stay in his role for another five years, executives said, though the number hasn't changed as the years pass.
Mr. Dimon sent a memo to employees Thursday detailing Mr. Zames's decision to leave, saying, "While I am sad to see him leave, I respect his decision and all he has done for J.P. Morgan Chase," according to a copy of the memo reviewed by The Wall Street Journal.
"Jamie has been public on numerous occasions he would like to be here another five years or so," Mr. Zames said in an interview Thursday. "I want to get back to...running a business."
Mr. Zames "didn't want to stick around" since it was unlikely he would be named CEO of J.P. Morgan in the near future, or at all, people familiar with the situation said. What's more, people within the bank viewed Mr. Zames's chances to gain the top spot to have fallen, according to employees and executives
What's more, people within the bank viewed Mr. Zames's chances to gain the top spot to have fallen within the past year or two, according to employees and executives.
The decision for Mr. Zames to leave was amicable and was Mr. Zames's decision, a spokesman for the bank said. While he aspires to be a CEO at another company, it won't necessarily be in finance, he said. Mr. Zames added that he is leaving the bank without another job lined up because he wants to "survey the landscape and make the right decision for me."
In departing, Mr. Zames becomes the latest in a string of potential successors to Mr. Dimon who have either chosen to leave rather than wait, or been pushed out. Such executives have included Jes Staley, who is now CEO of Barclays PLC, Bill Winters, currently CEO of Standard Chartered PLC and Charles Scharf, who until recently was CEO of Visa Inc., among others.
With Mr. Zames now out of the running, current executives viewed as potential CEO successor candidates include: Gordon Smith, head of the consumer-banking business; Daniel Pinto, head of the firm's corporate and investment-banking business; Mary Callahan Erdoes, head of its asset-management business, and Marianne Lake, the bank's chief financial officer.
Mr. Zames was elevated to his current role of chief operating officer in the wake of the "London Whale" trading scandal that cost the bank around $6 billion. The former head of the bank's fixed-income business, he was widely credited with helping to sort out the fiasco within the bank's chief investment office.
Mr. Zames is known throughout the bank as someone with a trader's personality, who is blunt and passionate about his work. He was said to have led the bank's cost-cutting efforts a few years ago with an iron fist, which frustrated some executives and employees.
But there are also "Zames guys," or employees who have worked alongside him and respect his work, especially in the corporate and investment bank. Some employees who had worked with Mr. Zames said they were surprised and disappointed in his decision to leave the bank.
In his current role, Mr. Zames oversaw a number of groups across the bank including cybersecurity, technology, real estate and other functions. Earlier, he held roles across the investment banking and trading businesses.
His role became more important in recent years as J.P. Morgan and other banks were tested by cyberthreats and upstart fintech companies.
J.P. Morgan responded by boosting its tech budget to $9.5 billion annually, according to a letter Mr. Zames wrote for the company's annual report in April that also highlighted the bank's hiring of outside programmers and its push into robotics and machine learning.
"I have never been more excited about the opportunities ahead," Mr. Zames wrote at the time.
Executives on the bank's operating committee will take on Mr. Zames's responsibilities, a spokesman said.
Mr. Zames was one of the bank's most highly paid executives. According to J.P. Morgan's most recent proxy statement, Mr. Zames was awarded total pay of $19 million for his work in 2016, up from $18.5 million the previous year and $17 million for 2014.
Mr. Zames's 2016 pay was the same as that of Ms. Erdoes and Mr. Pinto. It was $9 million less than the $28 million pay package the bank awarded Mr. Dimon.
According to a regulatory filing by the bank Thursday, Mr. Zames will be entitled to a future severance payment of $900,000, plus discretionary payments of $4.625 million in February 2018 and $4.5 million in February 2019.
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(END) Dow Jones Newswires
June 08, 2017 18:41 ET (22:41 GMT)