JPMorgan loses another potential chief exec

NEW YORK • JPMorgan Chase chief operating officer (COO) Matt Zames, the intense former hedge fund trader who was seen as a possible successor to chief executive officer Jamie Dimon, is leaving with the aim of running another company.

Investors need not follow, and shareholders should not fret at the departure, analysts said.

"I've been in this business for almost a quarter century, and I've spent the vast majority of my career building businesses front to back," Mr Zames, 46, said in a telephone interview last Thursday. "I want to get back to that, I want to face off with clients again. I love big and complicated things."

The departure is surprising, given his upbeat letter in the bank's annual report just two months ago. He ended his five-page missive saying he had "never been more excited about the opportunities ahead".

But the 61-year-old Mr Dimon is unlikely to step down anytime soon, and Mr Zames may have felt his opportunities at the bank were limited, Bloomberg Gadfly columnist Gillian Tan wrote. 

Both Mr Zames and Mr Dimon portrayed the separation as amicable. While Mr Zames said he does not have a specific position secured, he is interested in roles at technology and finance firms.

As was the case with Mr Gary Cohn's exit from Goldman Sachs Group, JPMorgan's leadership bench is arguably just as deep as Goldman's and has withstood the spotlight twice in the past few years - first when Mr Dimon was diagnosed with throat cancer and more recently when his name was floated as a potential nominee for US Treasury Secretary.

"There are plenty of people, if I was hit by a truck, who can run the company," Mr Dimon had said in late 2015 - while expressing his oft-repeated desire to stick around for another five years - "and there are plenty of people five years from now that can run the company, so the board and I both feel comfortable about that."

But Mr Dimon, who has been CEO since late 2005, has watched several of his most likely successors move on in recent years, taking top posts at other firms. 

Mr Frank Bisignano stepped down as co-chief operating officer in 2013 to run First Data Corp, and Mr Mike Cavanagh left in 2014 to take senior roles at Carlyle Group and later Comcast. Mr Jes Staley, who climbed JPMorgan's ranks over more than three decades to run its investment bank, left in 2013 and is now CEO of Barclays.

There is no doubt the bank's talent pool is shrinking.

"My first reaction is that Jamie is well ensconced and no one sees any upward mobility," Mr Charles Peabody, an analyst at Compass Point Research & Trading, said. "Most of these guys who leave are looking to run something and they must be concluding on their own that Jamie is not going anywhere. "

It would help JPMorgan to eventually put another feasible successor in the COO role.

But the roster of potential Dimon replacements is deep enough, including the five executives whose responsibilities have grown as a result of Mr Zames' quitting. Responsibility for the operations that Mr Zames oversaw - a sprawling list that includes technology, real estate, the chief investment office and military affairs - is being split among other top executives.

Shareholders shrugged off the news last Thursday, as JPMorgan's stock rose 1 per cent. The shares are basically flat so far this year.

There are no immediate plans to name another COO.

"Matt has worked tirelessly across many disciplines to help make us a better company," Mr Dimon said in a memo to staff. "While I am sad to see him leave, I respect his decision and all he has done."

Mr Zames, who wears his hair in a military-style buzz cut and is known as a zealot for efficiency, could take over just about any type of business after such a prominent post at the biggest bank in the United States, according to Ms Jeanne Branthover, a managing partner at executive search firm DHR International.

"Companies want superstars, and they're willing to take them from different industries," she said. "He's got so many talents and is so highly regarded I would think there are lots of companies, not just in financial services, looking for him to be a leader."

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A version of this article appeared in the print edition of The Straits Times on June 12, 2017, with the headline 'JPMorgan loses another potential chief exec'. Print Edition | Subscribe