Jamie Dimon just led JPMorgan Chase & Co. to the best year of any U.S. financial institution in history. Brian Moynihan steered Bank of America Corp. from the brink of ruin to years of profitability. With James Gorman at Morgan Stanley and Michael Corbat at Citigroup Inc., hard times have faded in memory.
These Wall Street captains have all been around awhile—14, 10, 10 and seven years, respectively. That makes them warhorses compared with the typical American chief executive officer, whose median tenure at big companies is 4.8 years, according to Equilar Inc.
Some industry experts are saying the steady hands that were needed to bring stability after the 2008 financial crisis could be keeping too firm a grip on power. And that may be holding back the next generation of executives.
“There’s a vacuum,” said Jeanne Branthover, who recruits financial executives for headhunting firm DHR International. While banks have improved their contingency plans for sudden death or illness, possible long-term successors remain unprepared and probably won’t be ready for at least two to four years, she said.
Corporate boards prepare for succession behind closed doors. While they rarely specify the names on the shortlist, observers are on the lookout for clues, in promotions or departures, to gauge whose star is rising.
To be fair, when it comes to picking the head of a major bank, it’s difficult to find candidates who tick all the boxes.
“You can be worried as hell, but you always have to be calm,” Moynihan, 60, said about the qualities he values in a CEO. “You can’t flinch when something goes wrong. You have to go fix it, deal with it.”
The right person needs a cornucopia of skills, including but not limited to well-rounded experience, a track record of making money, leadership savvy and credibility in the wider world. They also need to navigate the political shoals that can shipwreck the best candidates in any competitive corporate environment.
That explains why it took Wells Fargo & Co. almost six months to tap onetime Dimon protege Charlie Scharf, or why well-established bosses stay on for so long at other banks.
Have Patience
So add that rarest of attributes—patience—to the list of qualities candidates must exhibit.
The balancing act is playing out across the industry. As recently as last week, Dimon, 63, quipped that he’d like to stay on another five years—the same joke he’s told since at least 2014. That might prove to be a long wait for executives JPMorgan is grooming to succeed Dimon. They include co-presidents Daniel Pinto and Gordon Smith, CEO of consumer lending Marianne Lake and chief financial officer Jennifer Piepszak.
JPMorgan has been called a CEO factory because of its deep bench, and also due to some rising executives opting to leave to run other firms rather than wait for Dimon’s perpetual five more years to elapse, said Mike Mayo, an analyst at Wells Fargo. Dimon’s outsized stature at the firm poses a “key-man risk,” Mayo said.