(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Antony Currie
NEW YORK, Nov 20 (Reuters Breakingviews) - JPMorgan's
(JPM.N) latest executive reshuffle is one more step in
consigning the disastrous “London Whale” trade to history.
Promoting Marianne Lake to replace Doug Braunstein as chief
financial officer ticks a number of boxes for the bank. But one
last trick is needed to harpoon the episode for good. Chief
Executive Jamie Dimon remains unpunished for the fiasco
responsible for more than $6 billion of losses. Clawing back
some of his pay would complete the clean-up.
Dimon has already done a fair bit in addition to ousting
those who placed the bets. Ina Drew, who ran the Chief
Investment Office responsible for the trades, was sent into
retirement. And the bank accepted her offer to give up her
compensation from the previous two years. The risk-management
function was shaken up. And Dimon, presumably with the board's
assent, even put a new succession plan in place.
In fact, he had already effectively demoted Braunstein.
First, Dimon sidelined him by putting Michael Cavanagh, head of
Treasury Services, a former CFO and a now a front-runner to be
the next CEO, in charge of the probe into the CIO mess. Dimon
then downgraded the CFO function by no longer having Braunstein
report to him but to new co-chief operating officer and CEO
candidate Matt Zames.
Dimon is now restoring the office's place in the hierarchy.
Not only will new numbers chief Lake report directly to him; she
is also a chartered accountant who has spent her career in
finance and operations. That's a better background than being an
investment banker. Braunstein can now return to his roots as a
vice chairman advising the bank's top clients. Lake's
appointment also adds another woman to the executive ranks –
joining asset management boss Mary Callahan Erdoes on the
13-person operating committee.
Now Dimon needs to feel some pain, voluntarily or otherwise,
and not just because he's the boss: Drew reported directly to
him. Clawing back any of his pay is ultimately a decision for
the board. There's little reason to think Dimon himself would
not insist on it. But some timely chastising would be a welcome
way to close the whale affair.
SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS:
- JPMorgan Chase has promoted Marianne Lake to the position
of chief financial officer. She replaces Doug Braunstein, who
will become a vice chairman of the bank and return to his
investment banking roots and focus on advising the bank's top
clients. Braunstein has been CFO since June 2010.
- Lake is currently CFO of JPMorgan's consumer and community
bank. Before taking that role she was global controller of the
investment bank between 2007 and 2009 and managed global finance
infrastructure and controls in the corporate finance group
between 2004 and 2007. Previously she was the senior financial
officer in the UK. She started her career as a chartered
accountant at PriceWaterhouseCoopers.
- JPMorgan announcement: link.reuters.com/xej24t
- Reuters: JPMorgan names retail finance executive as new
Beware the grasshopper [ID:nL2E8IR561]
Bound by blubber [ID:nL2E8ID3JJ]
No pay for bad play [ID:nL1E8GE3XC]
- For previous columns by the author, Reuters customers can
click on [CURRIE/]
(Editing by Rob Cox and Emily Plucinak)
Keywords: BREAKINGVIEWS JPMORGAN/GOVERNANCE
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