Jamie Dimon, whose eight years atop JPMorgan Chase & Co. (JPM) have made him one of Wall Street's most powerful leaders, said he'll start treatment for throat cancer, raising new questions about succession plans at the biggest U.S. bank.
Dimon, the company's chairman and chief executive officer, told employees and shareholders in a memo his condition is curable and that he'll continue running the firm "as normal" during eight weeks of radiation and chemotherapy. The treatment will start soon at Memorial Sloan Kettering Cancer Center in New York, limiting his travel, the CEO said.
Dimon, 58, has led New York-based JPMorgan since the end of 2005, navigating the 2008 financial crisis without a loss and doubling annual profit as the lender's shares climbed about 45%. Six months ago, the board credited his ability to resolve government probes of the bank. The illness will revive questions about how the panel would theoretically handle his succession, said Ralph Cole, a portfolio manager at Ferguson Wellman Capital Management Inc. in Portland, Oregon.
"Transition has always been a question and now that will be at the top of investors' minds," Cole said. "They have to be very vocal about who's going to be stepping up during the eight-week period. They've got to be clear with everybody about who that is."
Thorough Planning
The bank has deep contingency and succession plans, and Dimon's illness may serve as no more than a valuable "fire drill," said Michael Farr, president of Farr Miller & Washington LLC, a Washington-based asset manager that oversees more than $1.1 billion, including JPMorgan shares.
"The good news is that every indication is that they will never be needed and that Jamie Dimon has many years to work and that he'll retire on his own schedule as a much older man," Farr said. "It feels unfair to watch someone who has really been through so much have to suffer through this."
JPMorgan declined 0.9% to $57.06 at 10:22 a.m. in New York. The shares have slipped 2.5% this year, compared with the 3.6% advance of the 24-company KBW Bank Index.
Dimon canceled a planned business trip to Europe this week in which he was to meet with the prime ministers of Greece and Italy, said Joe Evangelisti, a spokesman for the bank. The CEO probably will cut back on client visits during the treatment, Evangelisti said.
'Excellent' Prognosis
The board has succession plans for the short-term, medium-term and long-term should they be needed, Evangelisti said, declining to disclose the plans.
Dimon told colleagues he wants to remain CEO for an additional five years, a person with direct knowledge of the matter said in March. In his memo, he said he feels good, is keeping the board fully apprised, and that he'll say more if his condition changes.
"The prognosis from my doctors is excellent, the cancer was caught quickly and my condition is curable," Dimon wrote, according to a statement yesterday from the bank. "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."
"The cancer is confined to the original site and the adjacent lymph nodes on the right side of my neck," he wrote. "Importantly, there is no evidence of cancer elsewhere in my body."
'Iconic CEOs'
The son of a stock broker, Dimon is known for his charm and brusque manner. In 2011, he publicly challenged Federal Reserve Chairman Ben Bernanke over new regulations. In 2012, Dimon said the nation's housing market would have been fixed faster if he had been put in charge.
"He's one of the iconic CEOs who's totally identified with a company," said Nancy Bush, a bank analyst who founded NAB Research LLC in New Jersey. "It's tremendously important that people know he's still there, and I'm sure that will still be happening."
The bank posted its first quarterly loss under Dimon's leadership last year as it agreed to pay $23 billion in penalties and settlements. Full-year net income fell 16% to $17.9 billion. Profit will rebound to $21 billion this year, according to the average estimate of analysts surveyed by Bloomberg.
Cavanagh, Smith
"Clearly this is a seminal moment for JPMorgan," said Christopher Wheeler, an analyst at Mediobanca SpA in London, who has a neutral rating on the lender. "The problem is a number of the candidates to replace Jamie have left the bank in the last 18 months, so filling his shoes, which is a very big job, will not be straightforward."
