The news that JPMorgan Chase’s chief executive and chairman Jamie Dimon has been diagnosed with curable throat cancer has raised the issue of succession at America’s biggest bank.
Mr Dimon’s diagnosis has also re-raised the issue of the American habit of having the same person holding both the chairman and chief executive job titles.
The 58-year-old told colleagues his prognosis is excellent and that he will continue working as normal while undergoing eight weeks of treatment, but shareholders always want reassurance that succession plans are in place – despite this being an issue many companies are reluctant to talk about.
One potential successor, Mike Cavanagh, recently left JPMorgan Chase to join the private equity firm Carlyle, becoming just the latest senior executive to leave the bank.
Others could include Gordon Smith, the head of JPMorgan’s consumer bank; its chief operating officer Matt Zames; Mary Erdoes, head of asset management; Daniel Pinto, head of the corporate and investment bank; Doug Petno, head of the commercial bank; and the chief financial officer Marianne Lake.
“It’s an uncomfortable discussion,” the corporate governance expert Lucy Marcus said. “We all have difficulty talking succession planning, but it must be discussed.”
In JPMorgan’s case, Ms Marcus said many issues arise because one individual holds so much power and influence.
“Where you have the chairman and the CEO as one person and so much power and charisma, so much of the identification of the organisation is built around Jamie Dimon.”
Ms Marcus said the roles should be split. “If something should happen – we are mortal and you could get hit by a bus – what happens? This is one of the largest organisations in the world.
“The fact that so much power and so much of the bank’s identity is wrapped up in one person – that is an issue.”
Mr Dimon told investors earlier this year he hoped to stay at the helm at JPMorgan for about five years, after previously hinting he would consider leaving if the roles of chairman and chief executive were ever split.
In his written message to investors and colleagues on Tuesday night, Mr Dimon stressed he would work as normal during his treatment.
“While my travel will be curtailed during this period, I have been advised that I will be able to continue to be actively involved in our business, and we will continue to run the company as normal. I feel very good now and will let all of you know if my health situation changes.”
Apple was criticised for not being 100 per cent honest with shareholders about Steve Jobs’ illnesses. While JPMorgan and Mr Dimon have communicated well on this issue so far, shareholders need to be assurance succession plans for the top jobs are firmly in place.
Mr Dimon was a smoker in the 1980s but gave up, urging fellow executives to do the same, his biographer claims.