JPMorgan's Jamie Dimon succession dilemma

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One day JPMorgan Chase (JPM) CEO Jamie Dimon will no longer run the nation's largest and most profitable bank. But when? And who would fill his shoes?

It’s "an issue," said banking analyst Mike Mayo of Wells Fargo. "My best estimate would be the stock declines by 5% if Jamie were to leave suddenly. Which would make him the $20 billion man."

The questions about Dimon's future are gaining urgency as JPMorgan increases its hold over the rest of the industry. The bank's May 1 purchase of failed San Francisco lender First Republic increased its reach and influence while adding more to earnings. It also firmly established Dimon as the industry's rescuer-in-chief.

The 67-year-old Dimon has made it clear he has no near-term plans to leave. He has, however, also openly mused about life after JPMorgan.

"I can’t do this forever, I know that," Dimon told analysts on May 22. "But my intensity is the same. I think when I don't have that kind of intensity, I should leave."

UNITED STATES - SEPTEMBER 22: Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled Annual Oversight of the Nations Largest Banks, in Hart Building on Thursday, September 22, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
Jamie Dimon, CEO of JPMorgan Chase. (Tom Williams/CQ-Roll Call, Inc via Getty Images) · Tom Williams via Getty Images

The list of candidates, according to a person familiar with the bank's succession planning, includes longtime JPMorgan executive Daniel Pinto, who could step in if something went wrong suddenly.

If Dimon stays another three to five years, this person said, two consumer-banking bosses are considered frontrunners to succeed him: Marianne Lake and Jennifer Piepszak. Other executives could get consideration if Dimon stays longer.

JPMorgan Chase declined to comment.

Dimon admitted in an interview with Bloomberg last Wednesday that the thought of running for public office had crossed his mind. "I love my country, and maybe one day I'll serve my country in one capacity or another," he said.

Scott Siefers, a banking analyst with Piper Sandler, said investors will "almost certainly" expect a transition period that gives Dimon a long sendoff while providing the new CEO time to prepare for the role.

"It's a tough balancing act," Sieffers added.

Here is a look at how things could play out:

The 2026 deadline

It is possible Dimon, who became CEO in 2005 and is the longest-serving leader of a big US bank, could stay at least three more years. Why? Well, the board has made it clear it wants him running the bank that much longer.

The clue is a special retention bonus of 1.5 million options the board awarded Dimon in 2021. He can't exercise those options until 2026, and he has to stay at the bank the entire time while meeting certain performance targets.

The current expected value of the award is around $49 million, according to Andy Restaino of Technical Compensation Advisors. It cannot be exercised unless JPMorgan’s stock regains $149, its price when the bonus was awarded. The bank's stock closed Friday at $140.47.