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Out with the old, in with the new.
That’s the message JPMorgan Chase boss Jamie Dimon delivered yesterday as he shuffled the ranks of the sprawling bank’s executive suite.
The shake-up — Dimon’s second in two years — elevates rising stars Matt Zames, 41, and Michael Cavanagh, 46, to prime positions — setting up a contest, perhaps, to see who might eventually succeed the 56-year old CEO.
In addition to fueling Wall Street’s “who’s next” gossip mill, Dimon’s overhaul essentially realigns the nation’s biggest bank into two distinct parts: one catering to corporate clients and another offering loans to average folks and small businesses.
Cavanagh, head of a group within Chase’s investment bank that handles Treasuries and other securities, has been named co-CEO of the investment bank along with Daniel Pinto, 49, who ran a global fixed-income unit.
Cavanagh had served as CFO of JPMorgan for six years until 2010, when Dimon last shook things up.
The latest re-shuffle sees Zames, who was entrusted with helping clean up the mess created by JPMorgan’s embarrassing $5.8 billion loss tied to derivatives bets made by the so-called “London Whale,” become co-Chief Operating Officer of the whole firm along with veteran Frank Bisignano, 52.
Zames will retain his previous titles as head of a group focused on mortgage debt as well as new head of the Chief Investment Office, a post relinquished by Ina Drew in the wake of the Whale fiasco.
After the shake-up, CFO Doug Braunstein and Barry Zubrow, who head regulatory affairs, will report directly to hotshot Zames.
Meanwhile, the old head of the investment bank James “Jes” Staley, 55, who has long been viewed as a replacement for Dimon, will take on a chairman role of the I-bank.
Bank brass, including Dimon, insist the recent changes have been in the works for years and have nothing to do with the Whale episode.
Dimon did acknowledge that the bank needed to better align its businesses while the banking industry is facing its fiercest headwinds in a generation.
“As the global environment rapidly changes, we need to evolve to position ourselves around what’s best for our clients, as well as emerging trends and opportunities for growth,” Dimon said in an internal memo about the shuffling.
The moves also came two days after Sandy Weill, the architect of the supermarket banking model — which brings together investment banks and consumer lenders — stunned Wall Street by calling for a breakup of the big banks.
Indeed, Barclays analyst Jason Goldberg said that JPMorgan’s restructuring may stoke talk that big firms may indeed split up.
“We believe [JPMorgan’s move] could help fuel the speculation that some of the larger banks may look to more formally separate their consumer and investment banking operations.”
The new structure will see Gordon Smith, head of the bank’s cards division, become co-CEO along with Todd Maclin, head of commercial banking of a new merged consumer and community banking unit.