Possible Successor Emerges at JPMorgan Contender To Lead JPMorgan Emerges Lake Is A Possible Successor To Dimon -- WSJ

By Emily Glazer 

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 (February 26, 2018).

When JPMorgan Chase & Co. tried last month to clarify the question of when Chairman and Chief Executive James Dimon would step down, the firm got a lot more questions about who could fill one of the most powerful roles on Wall Street.

One of the most intriguing: What about Marianne Lake?

JPMorgan's 48-year-old chief financial officer, Ms. Lake is one of the most senior women on Wall Street and has been on the bank's short list of possible successors for years, people familiar with its board say. January's announcement by the bank of executive moves makes her an even more likely contender.

In one respect, Ms. Lake would be a historic choice, the first female chief executive of one of the largest U.S. banks. A single mother of three young children, Ms. Lake has already become a role model for women in finance, juggling a high-profile job and family demands.

In her first year as CFO, 2013, Ms. Lake won praise for her handling of the fallout from the bank's 2012 "London whale" trading loss. She is well known to investors and analysts, a fixture on the bank's quarterly earnings calls who sometimes acts as a diplomatic foil to her outspoken boss.

During one call in October, for example, Ms. Lake tempered criticism Mr. Dimon had levied on the volatile digital currency bitcoin, which he'd recently called a "fraud." After Mr. Dimon deflected follow-up questions, Ms. Lake gave a more measured response, saying the bank is "very open minded to the potential-use cases...for digital currencies that are properly regulated."

Of course, the palace intrigue about Mr. Dimon's successor is in its early days. And another female executive, Mary Callahan Erdoes, is also a contender.

Even Ms. Lake's supporters said she would have to move into another job leading a business and do well there to create the momentum that would be needed to succeed Mr. Dimon.

A 19-year veteran of the bank who grew up in England, Ms. Lake has mostly held finance-related jobs that don't produce client-driven revenue. Before her appointment as CFO, Ms. Lake led finance for the consumer banking unit and earlier was the investment bank's global controller.

Other candidates viewed among JPMorgan insiders as possible CEOs of the largest U.S. bank by assets have run divisions that generate revenue. For example, Doug Petno, 52, is head of the bank's commercial-banking business. Ms. Erdoes, 50, leads the asset and wealth-management businesses.

Ms. Erdoes was awarded $19.5 million in compensation last year, compared with $13.5 million for Ms. Lake and $12 million for Mr. Petno.

Those two executives and Ms. Lake were mentioned in JPMorgan's January announcement of executive moves. Most important, the bank and its board said in the announcement that Mr. Dimon plans to stay in his role about five more years.

That marked the first time the bank publicly put a timeline on what is likely to be the length of his tenure. Having become chief in late 2005, Mr. Dimon is the longest-serving CEO of the big-six U.S. banks.

The announcement turned the succession race within JPMorgan's C-suite, which has produced years of jockeying by executives, into a real event.

Ostensibly, the front-runners are Gordon Smith and Daniel Pinto. The January announcement featured their promotion to the No. 2 role below Mr. Dimon.

However, the five-year horizon given for Mr. Dimon suggests those two executives may actually be out of the running, people close to the bank said. This is because both will be 60 or older at the end of that period, an age many analysts and investors believe will likely put them out of the running.

Ms. Lake, Mr. Petno and Ms. Erdoes, on the other hand, would be in their 50s, a more common age for a new bank CEO. At the big-six U.S. banks, the current CEOs took over when they were at or between the ages of 49 and 56.

A JPMorgan spokesman said all the executives declined to comment.

The elevation of Messrs. Smith and Pinto is also potentially significant for Ms. Lake in another way, according to people familiar with the matter. Those executives run the retail division and the corporate and investment bank, respectively.

Ms. Lake will likely be a candidate to fill one of these spots, or to take up part of the duties of one of the positions, according to people familiar with the matter.

Meanwhile, Ms. Lake will again MC JPMorgan's investor day on Feb. 27 as she has done in the past. But this year that role is expected to take on added prominence, according to people familiar with the matter.

Write to Emily Glazer at [e-mail]

(END) Dow Jones Newswires

February 26, 2018 02:47 ET (07:47 GMT)

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