JPMorgan Chase’s decision to promote two potential CEO contenders to co-lead the bank’s sprawling consumer and community banking division shows the firm is positioning two strong candidates to compete for the top role, said Jeanne Branthover, global head of financial services at headhunting firm DHR International.
The bank’s latest leadership shuffle, announced Tuesday, puts Marianne Lake, who has led the bank’s consumer lending unit for the past two years, and Jennifer Piepszak, the bank’s CFO since 2019, in prime positions to showcase their abilities to replace CEO Jamie Dimon when the time comes.
"It's almost like a testing ground, and it’s a really good leadership exercise," said Branthover, who has worked on executive recruiting for the New York City-based bank in the past.
Branthover said JPMorgan’s succession strategy is one she is seeing play out more often in the financial services space. Executive leadership wants to see contenders vie for the top spot, rather than groom a particular candidate for the job, she added.
"I believe that a lot of CEOs want their people to compete to become the CEO. In other words, here's the foundation of who could be the person, but really, you have a runway of proving that you should be the person," Branthover said. "What we're finding in executive searches is, it's not so much a successor is named anymore, it's more a group of people that could become the successor to the CEO and the question is, who does what during that period of time to become it?"
Morgan Stanley on Thursday announced its own leadership changes indicating the investment bank may be taking a similar approach to finding an eventual successor for CEO James Gorman.
Ted Pick, the head of the bank’s institutional securities group, and Andy Saperstein, who leads Morgan Stanley’s wealth management arm, were named co-presidents of the bank, effective June 1, setting up a succession race. Gorman also tapped a new co-head of strategy and a chief operating officer, adding even more candidates to the fray. "I am highly confident one of them will be the CEO in the future," Gorman, 62, told Bloomberg of the four.
For both firms, it appears each pool of potential successors will have some time to showcase their aptitude for the chief executive position.
Gorman has reportedly told the bank’s board he intends to remain CEO for at least three more years.
JPMorgan’s board has said it would like Dimon, 65, to remain CEO for a "significant number of years," said the bank's spokesperson, Joseph Evangelisti, according to The New York Times.
Dimon has been known to joke over his tenure that he would stay in the top spot another five years.
"We all know Jamie, it could be two years from now or it could be five years from now," Branthover said. "But the bottom line is, I think it's too early to name someone if he doesn't really have an exit strategy yet. So it does give him time to form his leadership — the most senior qualified, credible leadership team across the board."
Lake and Piepszak both have strong track records, Branthover said, and will likely continue in key leadership roles even if neither is chosen as CEO. (The top position could also go to the bank's current No. 2, President Daniel Pinto, or another candidate.)
"These two women, I think, work well together and respect each other. And I think, whether one of them becomes the CEO or not, these are two women that I think are here to stay for a long time, and they're going to be the leadership of the bank," she said.
Piepszak and Lake have each also held the bank's CFO position — a distinction Branthover said brings a valuable set of skills to the top job.
"What we're finding is, who becomes the CEO very often today is somebody that really understands the numbers," Branthover said.
Should either Piepszak or Lake emerge as CEO when the time comes, it would mark at least the second time a major U.S. bank has picked a woman as its top executive. Citi’s Jane Fraser became the first when she succeeded Michael Corbat on March 1.