NEW YORK (
latest management changes have stoked discussion about whether an heir apparent is being lined up to replace Chairman and CEO Jamie Dimon but there's no indication the 53-year-old banker is likely to be leaving his perch anytime soon.
Front and center in the retooling is Jes Staley, currently the company's head of asset management and a 30-year veteran at the firm. Effective immediately, Staley will be stepping into the role of CEO of JPMorgan's prestigious investment bank division, a high-profile post that would appear to give him the inside track to the top job, although a number of other names would be in the mix.
As for the other changes Tuesday, the current co-head of the investment bank unit, Steve Black, will become executive chairman. His counterpart Bill Winters is the odd man out, leaving the company after 25 years. Black will stay on in his current role until the end of 2010 to assist in the transition. The company did not provide information on Winters' future plans. Mary Callahan Erdoes, the CEO of the company's private bank division, is taking over Staley's position heading up the asset management business.
Dimon attributed the timing of the changes to improvement in market conditions.
"With the credit crisis largely behind us and the economy recovering, the timing was right to begin the succession process," he said in a statement, referring specifically to the changes in the investment bank division, not the company as a whole.
"All the banks are being urged to have some succession plan in place," says independent analyst Nancy Bush. "Obviously for JPMorgan it's way premature. This is sort of a quasi-succession plan. ... It simplifies the whole investment banking
Bush said that the beginnings of succession plans are typically put in place roughly five years before the CEO is to leave. She notes that more and more banks are forcing executives to retire by age 65.
Still Bush says that Staley would be more than capable of running the company if it came down to it, noting his experience in both asset management and investment banking. "Those are two very important businesses," she says, and potentially more important in Dimon's eyes than the retail banking business.
While rivals like
Bank of America
have endured endless speculation about when their CEOs would be ousted, JPMorgan's Dimon is much admired.
One of the hallmarks of this company is its deep management bench at the top and across its businesses and how well this team has worked together before and during the crisis," writes Guy Moszkowski, an analyst at Bank of America Merrill Lynch.
Given Dimon's young age, Tuesday's announcement "should not be viewed as a sign of imminent changes at the top," according to Moszkowski.
That being said, plenty of other names could be thrown into the hat as possible Dimon successors, observers say.
The previously mentioned Erdoes, along with CFO Mike Cavanagh and Charlie Scharf, the head of the company's retail financial services business, are a part of the growing crop of young and able executives potentially being groomed for Dimon's position.
The departing Winters, who just turned 48 on Sunday, was never seen as a possible heir apparent to Dimon, but Jeff Harte, an analyst at Sandler O'Neill & Partners, writes in a note that given Winters' successful track record at JPMorgan," we expect to see him resurface in a senior role sooner rather than later."
London-based Winters had worked at JPMorgan since 1983, assuming a variety of top roles in its investment banking and global markets businesses. He was named co-head of the investment bank in 2004, the same year that JPMorgan Chase merged with Bank One.
In 2008, Winters was reportedly being considered as a possible successor to
Royal Bank of Scotland's
former CEO Sir Fred Goodwin in a hasty succession plan that was to be put in place.
According to the U.K. publication the
, Winters was to be hired as the head of RBS's troubled global banking and markets division and fast-tracked to replace Goodwin. But that plan was shelved after the global financial crisis took a toll on RBS and its capital levels, given its disastrous acquisition of parts of Dutch bank ABN Amro. Goodwin was forced out in late 2008.
A JPMorgan spokesman said that, while there is never a perfect time to make significant management changes, "as part of our long term succession planning, it's good to do this from a position of strength." He added that the changes were being made as the company sets its 2010 budget.
JPMorgan's investment bank has seized on signs of life in the M&A advisory business and capital markets so far this year. For the first half of 2009, the division recorded a profit of $3.07 billion, up considerably from earnings of $307 million in the comparable period last year, according to a recent investor presentation.
The stock was up 16 cents to $44.97 just ahead of the closing bell.
--Written by Laurie Kulikowski in New York.