Hop on that wagon
Wells Fargo is showing rivals what a real succession plan looks like. America’s most valuable bank, with a $282 billion market cap, has just promoted veteran Tim Sloan to president and chief operating officer. He now seems set to take the top job when Chief Executive John Stumpf hits mandatory retirement in 2018. It’s a lesson in leadership that other banks have had a hard time learning.
JPMorgan boss Jamie Dimon, for example, has tended to push out possible heirs, including two erstwhile chiefs of the investment banking division, Bill Winters and Jes Staley. They’re now the top dogs at UK banks Standard Chartered and Barclays, respectively.
Dimon has also let a few slip away. Mike Cavanagh quit JPMorgan to join the Carlyle Group and is now finance chief for Comcast. Former retail boss Charlie Scharf runs Visa, while Frank Bisignano, the ex-chief administrative officer, heads First Data. Derivatives whiz Blythe Masters, former community-banking boss Scott Powell and a host of other alumni are in charge at Santander’s U.S. outfit. JPMorgan, it seems, is a tough place to spend an entire career.
Bank of America and Citigroup, meanwhile, have in recent years created near-chaos at the top. Citi Chairman Mike O’Neill ousted Vikram Pandit four years ago and put Mike Corbat in charge. BofA took its time appointing Brian Moynihan as CEO in 2009 to replace Ken Lewis, whose crisis cock-ups caused him to resign.
None of those three banks has an obvious replacement for the man at the top. To be fair, neither did Wells Fargo until Sloan’s promotion on Tuesday – and Stumpf has been in charge for eight years. Wells, though, has had less executive turnover than the three peers. The one high-profile exception was the sudden, unexplained departure in 2011 of long-time finance chief Howard Atkins.
As a result, Wells has a deep bench of bank veterans to choose from if Sloan isn’t up for – or up to – the job. They include finance chief John Shrewsberry, community-banking boss Carrie Tolstedt and consumer-lending chief Avid Modjtabai.
That stability may well play a role in the bank’s superior results. Dimon, Corbat and Moynihan may want to pay attention.