By Anirban Sen, Nupur Anand and Manya Saini
NEW YORK, June 29 (Reuters) - Over the years JPMorgan Chase CEO Jamie Dimon has talked many times about succession - but a date to hand over the baton seemed elusive. This time, sources said, the plan is real.
Dimon plans to stay as CEO for up to three more years, with insiders hoping that the bank will name his successor - Troy Rohrbaugh or Doug Petno, the bank's newly named co-presidents - ahead of that.
Rohrbaugh, who has been tasked with running JPMorgan's
massive consumer business, is seen as having the lead internally, according to the views of two senior executives at the firm. They added that Rohrbaugh's promotion to the other side of the bank from the commercial and investment banking business suggests he's the frontrunner to take over the top job from Dimon.
And when the time comes, Dimon would become executive chairman, a separate source familiar with the matter said, echoing what Dimon has said publicly and speaking on condition of anonymity because the discussions are private.
The succession, if it were to come to pass, would end one of the longest-standing questions on Wall Street: Who will replace Dimon, the statesman banker who has built JPMorgan into the biggest and one of the most profitable U.S. banks.
Shareholders are prepared for Dimon to finally hand over, but want it to be done as smoothly as possible.
"My only request of the firm is that it is very clearly laid out and handled seamlessly," said Walter Todd, chief investment officer, Greenwood Capital in South Carolina, which owns JPM shares, describing Dimon's succession as "inevitable".
TIMELINE MAPPED OUT
Dimon himself has been vocal about succession, both publicly and in private. In a social meeting weeks ago at the bank's new headquarters in Manhattan, Dimon, unprompted, told a senior Wall Street executive about the "deep bench" of talent JPMorgan has to succeed him, a second source said. JPMorgan declined comment on the conversations.
Dimon is expected to stay in charge for up to three more years before transitioning to executive chairman, but a successor could be named earlier, within two to two-and-a-half years, one of the sources said. Every board meeting is devoting a significant amount of time to the succession question, the source said. After handing over the reins, Dimon will likely stay as executive chairman for a couple of years, the source said.
Previously, Dimon had given varying timelines. He said in 2024 he envisioned an exit in less than five years, a similar message to that given in 2018. Earlier this year, he said he wanted to stay on at least five more years, in a comment his spokespeople said at the time was a joke. In February, he said he would remain for a few years as CEO.
Spokespeople for Rohrbaugh and Petno declined to comment.
RISKS OF WAITING
Even a two-to-three year timeline carries risks.
The two executives stressed that a wait of up to three years could raise the risk of the bank losing potential successors, with one saying it would likely be a concern for the board.
While JPMorgan awarded four of its top executives, including Petno and Rohrbaugh, multimillion-dollar retention pay packages, the bank's board would likely not want to lose them or any other potential successors during the unofficial waiting period, one of the executives said.
Numerous senior executives including Matt Zames, Charlie Scharf and Bill Demchak left the firm during Dimon's tenure to take senior roles elsewhere.
They did not immediately respond to a request seeking comment.
If Rohrbaugh or Petno quickly impress, the bank could move more swiftly, the two executives said. One of the executives said that the view within the bank was that Rohrbaugh has the lead, with an impressive track record having come up through the ranks as a trader, although a separate source said that Petno should not be written off given his track record of bringing in large deals.
On the betting platform Kalshi, Rohrbaugh has pulled ahead at 45%, with Petno at 34%.
For Rohrbaugh, who built his reputation on trading floors, taking the CEO role would mean a big shift to the bank's sprawling suite of branches, credit cards and mortgages, a division that accounted for nearly 39% of its total revenue in the first quarter. The 56-year-old began his career as a foreign-exchange trader and joined JPMorgan in 2005.
Petno, 61, meanwhile, takes sole charge of the commercial and investment bank after a 35-year career at JPMorgan. He is a seasoned banker who spent more than two decades in investment banking and led J.P. Morgan's Global Natural Resources Group. The division encompasses global banking, markets, payments and securities services, placing him at the helm of some of the lender's most profitable businesses.
If the bank proceeds with an accelerated timeline, it would mirror a similar move at rival Morgan Stanley, where Ted Pick was chosen to succeed longtime CEO James Gorman more than two years after being appointed co-president.
Still, shareholders are more than happy to see Dimon stick around. Eric Kuby, chief investment officer, North Star Investment Management Corp., which owns JPMorgan shares, said the shares "command a premium multiple" compared to other major bank stocks partly due to the Dimon factor.
"The market is well aware of his intentions to not run JPMorgan for very much longer," Kuby said. "But we think he does a great job, so the longer he is steering the ship, the better."
(Reporting by Anirban Sen and Nupur Anand in New York and Manya Saini in Bengaluru; Additional reporting by Utkarsh Shetti, Lewis Krauskopf,Tatiana Bautzer; Editing by Megan Davies and Sanjeev Miglani)
