JPMorgan names Piepszak, Lake and others as potential successors to CEO Dimon By Reuters

Manya Saini and Nupur Anand

(Reuters) – JPMorgan Chase’s board has identified a potential successor to Chief Executive Officer Jamie Dimon, paving the way for a leadership transition at the largest U.S. bank.

In the medium term, the board is “devoting significant time to developing members of the operating committee who are well-known to shareholders as strong potential CEO candidates,” the company said in a proxy statement.

Dimon, 68, has run JPMorgan for more than 18 years and has become one of the most influential people in American business.

Contenders for the top job include Jennifer Piepszak and Troy Rohrbaugh, who were recently named co-CEOs of JPMorgan’s expanded commercial and investment banking, Marianne Lake, CEO of Consumer and Community Banking, and Mary Erdoes, CEO of Wealth and Wealth Management.

Succession has been in focus across Wall Street in recent months, with new CEOs taking over at Morgan Stanley and Lazard (NYSE:). Other banks have rotated executives across departments to provide a more well-rounded experience.

Last May, Dimon signaled he could leave in three and a half years.

JPMorgan has gradually built up succession conversations since Dimon underwent emergency surgery in March 2020, said Chris Marinac, director of research at financial adviser Janney Montgomery Scott.

“But I don’t think this means Dimon will leave tomorrow. He could be here for a few more years,” Marinac said.

Brian Mulberry, client portfolio manager at Zacks Investment Management, predicted Dimon would leave within five years. Mulberry holds shares in JPMorgan and other large banks.

“Given the increasing discussion and disclosure around succession, my target date would be within two to five years,” Mulberry said. “Otherwise these types of letters, revelations, discussions would not be very public,” he said of his cautious approach.

Meanwhile, Daniel Pinto, JPMorgan’s president and chief operating officer, has been cited by the board as an executive who could replace Dimon as CEO in the short term, as he did in 2020 when he underwent emergency heart surgery.

“We view Mr. Pinto as a key executive who is prepared to immediately assume the responsibilities of CEO if a need arises in the near term,” the statement said.

Piepszak and Lake are widely seen as likely frontrunners, Piper Sandler analyst Scott Siefers wrote in a January note.

Mulberry said Piepszak had a slight edge given that investment banking will be a key driver of revenue growth over the next two years. He added: “It is more likely that the CEO of that business will succeed Dimon.”

During his nearly 30 years at JPMorgan, Piepszak served as treasurer from 2019 to 2021 and ran card services and business banking. The executive also held senior positions in investment banking for 17 years.

Lake, a 20-year veteran of the bank, previously served as finance director from 2013 to 2019. She leads the consumer segment, which accounts for the bank’s biggest revenue, generating $18 billion in the fourth quarter.

The two women were among the executives responsible for the integration, but it failed. First Republic Bank (OTC:) following its acquisition by JPMorgan last year. The rise of the two executives will further diversify Wall Street’s top ranks after Citigroup’s Jane Fraser became the first woman to lead a major U.S. bank in 2021.

“They certainly have a solid list of top internal candidates, many of whom are women,” said Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.

Globally, women make up 28% of JPMorgan’s senior executives, Dimon said in his annual letter to shareholders on Monday. The largest companies, large enough to become Fortune 1000 companies in their own right, are run solely or jointly by women.

In a widely read message to investors, Dimon praised America’s leadership and economic power and called for “liberty and justice for all.”

Dimon, who took office in 2006, is among a group of financial CEOs whose names have been floated for senior economic roles in government.

Last week, the Wall Street Journal (WSJ) reported that former U.S. President Donald Trump’s associates were considering high-ranking Wall Street executives, including Dimon, for the position of Treasury Secretary.

Dimon’s compensation increased about 4.3% in 2023 to $36 million. Pinto’s total compensation was $30 million, while Erdoes received $27 million.

Piepszak and Lake each earned $18.5 million in 2023, while Chief Financial Officer Jeremy Barnum earned $15 million.

“Jamie Dimon is irreplaceable” and “has delivered incredible results for shareholders,” said Macrae Sykes, portfolio manager at Gabelli Funds, which holds the bank’s stocks.

“JP Morgan will be different after Jamie Dimon, but confidence in the brand, customer engagement and prospects for future shareholder returns should not materially change under a new leader,” he added.

The lender also announced that two directors on its board, Timothy Flynn and Michael Neal, had decided to retire at the end of their terms on the eve of the 2024 annual general meeting in May.

Shares of JPMorgan closed 0.5% higher. The company is scheduled to announce its first quarter results on Friday.