JPMorgan announces leadership changes

On Tuesday, JPMorgan Chase announced several changes to its senior management. Brian Cheung joins Julie Hyman, Brian Sozzi and Myles Udland to discuss what the moves mean for the largest U.S. bank.

Video transcript

MYLES UDLAND: JPMorgan is holding its annual shareholders meeting. And while it doesn't have a Warren and Charlie component, there is some news coming out of that event. Really, the headline here is that the company's president or co-president and COO, I should say, Gordon Smith is retiring. And that leads to a number of executive changes down the chain. Yahoo Finance's Brian Cheung, who covers banking for us here, has all the details. Brian, and I guess, a couple of readthrough not only on who's running JPM today and these subunits going forward, but maybe a little bit of clarity on who the next CEO might be. Of course, Jamie Dimon, longest tenured major bank CEO in the US.

BRIAN CHEUNG: Yeah, absolutely. I mean, the question of what's going to happen at JPMorgan Chase if Jamie Dimon were to step down at some point has been a point of speculation seemingly every few months. But it does seem that we're getting a little bit more clarity with the shuffle that's happening at the C-suite over at JPMorgan Chase. As you mentioned, they're announcing that Gordon Smith, who headed the community and consumer bank at JPMorgan Chase, will be stepping down. He wants to spend more time with his family.

So in his place, Jamie Dimon putting up Jen Peipszak, who's the current CFO, in addition to Marianne Lake, the former CFO, as co-heads of that community banking division. The new CFO to replace Jen Peipszak, who, again, was the current CFO, is going to be Jeremy Barnum. He was the head of JPMorgan Chase Research.

Now for those that are wondering how significant is it, doesn't that sound like a demotion going from CFO to head of a community banking division at this bank? Keep in mind that Chase Bank, again, that portion of JPMorgan Chase, accounts for about 40% of net revenues for the whole company at large. And also consider that Chase Bank itself actually reaches about half of US households through its credit cards, banking services, other types of financial services products. So, obviously, having that type of a role at that bank is pretty important for the whole operation here.

Now, what's been interesting is that this is not the first time we've had a major shuffle. You have to remember that both Marianne Lake and Jen Peipszak have had 10 years now as CFOs of this large organization. It appears to be Jamie Dimon's approach to maybe shuffle a lot of these executives around, so they can get a full holistic understanding of how this large machine really works.

But it is worth noting that despite the shuffle, there's still Daniel Pinto, who currently heads the corporate investment bank, who would technically be the one to replace Jamie if something were to happen. You recall he had that health scare at the time. It was Gordon Smith who was in the role to be able to replace them. So it seems like Daniel Pinto now kind of moving into that next position, although, again, who knows what the next step is going to be. Jamie Dimon not saying he's going to leave any time soon, but this reshuffling giving us a little bit more clue as to who he might want to favor if that were to happen, guys.

JULIE HYMAN: You know, when we get a company like JP Morgan that's so synonymous with one person-- in this case, Jamie Dimon, really is the crux of some people's investment cases for the bank, right, because he has run it so smoothly for such a long time. How is the bench, though, viewed at JP Morgan? As we get these reshufflings, how does the Street regard all of these various lieutenants?

BRIAN CHEUNG: Yeah, well, it's hard to kind of get a read on how markets are reacting to this. Obviously, this [INAUDIBLE] kind of just hitting the wire a few minutes ago, or actually, in the last hour. But what we do know is that, again, this is part of Jamie Dimon's strategy that he's had over the past few years when you take a look at, for example, Marianne Lake, who she was the CFO for about six years. And that seemed to be the largest tenure when it came to that position. Marianne-- or rather, Jen Peipszak-- will ultimately only have about a year and change in that role.

So Jamie Dimon does like to shuffle people around there. And that makes sense because JPMorgan Chase is such a large business. I mean, it's pretty jarring when you see the statistic that, yes, Chase Bank itself reaches about half of all US households, but it still only accounts for about 40% of the company's net revenues. So there's a lot of other divisions in this, as we break down every quarter when it comes to these reports. That's why Daniel Pinto is still very much a big part of the possible succession plan because he's running that corporate bank, which, especially during the pandemic, has really contributed to a lot of the growth for this particular bank.

So I think when we look forward, it's these three main candidates-- Daniel Pinto, Jeb Peipszak, Marianne Lake, who could be in that pole position to replace him at some point in time. But again, who knows when Jamie Dimon is going to to leave this bank, or if he ever will? He's in his mid 60s. But of course, he had that health scare. Maybe that brings up the timeline in the future. But at least for right now, he's still at the top of this big bank.