JPMorgan’s London Whale shakes up Dimon succession race
FORTUNE — The wake of the London Whale is still being felt at JPMorgan Chase.
Just two weeks after announcing that a mix of risky trades out of its London office cost the bank $5.8 billion, JPMorgan (JPM) on Friday announced that it’s shaking up its management ranks, elevating at least one executive who played a big role in cleaning up the trading loss. The bank also moved aside one executive long thought to be a leading contender to succeed JPMorgan CEO Jamie Dimon, making way for younger executives.
Of course, there is no indication that Dimon will step aside anytime soon. And a JPMorgan spokesperson said the moves have been in the works for months, long before the trading losses emerged. Still, it appears that the mess up at JPMorgan has opened the door for a crop of younger executives to take more of a leadership role at the mega-bank.
What’s surprising is how much turnover there has been at a bank that is seen by many to have sailed through the financial crisis more gracefully than most. The current move ousts one of the last of a group of JPMorgan executives who Dimon appeared to have relied on to steer the firm through the financial crisis. When FORTUNE wrote about JPMogan back in September 2008 among a group of executive we deemed Jamie Dimon’s swat team, where Heidi Miller, Steve Black, Bill Winters, Charles Scharf, Barry Zubrow and Ina Drew. All no longer have management positions at the firm. Zubrow and Drew both recently had held positions in charge of the unit that was responsible for the trading losses. Zubrow gave up that role in January. Drew recently resigned from the bank and said she would give back two years of compensation.
Also in the group was Jes Staley, who was long seen as a potential Dimon successor, and the subject of a 2010 FORTUNE piece The other guy you need to know at JPMorgan. Now it appears Staley is out of the running. On Friday, JPMorgan said Staley, who had headed investment banking, was going to be named chairman of that division, meaning he will no longer have a day-to-day role running one of the most important divisions at the bank. Said one Wall Street recruiter, “He is being kicked upstairs. It’s not a promotion.”
The moves at the bank today appeared to be good for four younger executives, one of which played a leading role in resolving the bank’s London Whale mess. Mike Cavanagh, 46, was named co-CEO of JPMorgan’s corporate and investment banking operations. Cavanagh headed up the firm’s investigation into what went wrong at the firm that lead to the huge trading loss, and how to correct the problems. Cavanagh spoke at length about the trading losses on JPMorgan’s recent conference call with analysts and investors — a very public role for an executive who was has largely worked behind the scenes before the recent trading crisis.