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The author is a former investment banker and author

The most important decision a CEO can make is to choose a successor. So why are so many top executives doing this then?

As part of the research for my upcoming book on the rise and fall of GE, I spent many hours with Jack Welch, the legendary CEO of the company, before he passed away in March 2020.

At our very first meeting, during lunch with hot dogs and tomato soup at one of his two golf clubs on Nantucket, and before I could sit down, Welch found out he had made a terrible mistake when he chose his successor, Jeff Immelt. he blames the deterioration of GE. He was plagued by feelings of guilt and wanted me to know that he believed that his legacy would be ruined forever by the single decision. (He actually used more colorful language.)

Welch was not the only one struggling with the succession. Just look at some of Wall Street’s biggest animals. Of course not all the big banks. Both Goldman Sachs and Citigroup seem to have made wise and good choices over the past few years, with David Solomon and Jane Fraserrespectively the successor of Lloyd Blankfein and Michael Corbat.

James Gorman, who has been Morgan Stanley’s CEO for 11 years, retires in three years, at 65, and has set up a successive dogfight between Ted Pick, effectively head of investment banking, and Andy Saperstein, head of wealth management. Elsewhere, the situation is less clear.

At JPMorganChase, the country’s most valuable banker, Jamie Dimon, who is already more than 16 years old and already 65, tried to find out who his successor will be.

But first he has to find out when he leaves. He had some health problems, including emergency heart surgery iIn 2020, Daniel Pinto and Gordon Smith had the bank run in his absence. But neither of the two men is a clear contender for Dimon. Smith retires at the end of this year and Pinto, 57, may be too old by the time Dimon steps aside.

Dimon, who looks fit like a violin these days, is not going soon anyway. In July, the independent directors of the JPMorganChase Board awarded Dimon a special temporary grant of 1.5 million options. This can only be exercised if he sticks around and leads the bank for another five years, although the board says “there are limited exceptions” to this rule.

All that Dimon set up his own horse races between Marianne Lake and Jennifer Piepszak, the recently named co-heads of consumer loans and community banking, it’s clear the board wants him in charge until he’s 70, or maybe longer.

“This special award reflects the desire of the board that Mr. Dimon will continue to lead the firm for a significant number of years to come,” the company said in a statement. filing.

The Jamie Dimon coaching staff is legendary on Wall Street and full of ambitious drivers who have been tired of waiting for Dimon’s departure. Among others, there is Jes Staley, the CEO of Barclays; Charlie Scharf, CEO of Wells Fargo; Bill Winters, CEO of Standard Chartered Bank; and Seth Bernstein, CEO of AllianceBernstein.

Who knows what will happen in five years, whether Lake or Piepszak will stay to see Dimon off stage.

Then there is the disorganized succession uncertainty that overwhelms Bank of America, the country’s second largest bank.

At the end of August, the bank announced that two senior executives are leaving: Tom Montag (64), the chief operating officer and longtime head of Merrill Lynch, its investment banking subsidiary, and Anne Finucane, 69, the bank’s vice chairman.

Surely neither Monday nor Finucane were in a position to succeed the CEO Brian Moynihan, who, like Gorman at Morgan Stanley, had been in charge for 11 years. Moynihan is 61 and is not going anywhere.

On September 10, Moynihan announced a whole bunch of changes in the management of the next generation and indicated that he would stay until the end of the decade. He did not make clear who was in line to follow him. This has worried some analysts on Wall Street.

“It’s not like it’s a horse race where you have two or three,” Mike Mayo, a research analyst at Wells Fargo, told me. “It looks more like the Kentucky Derby.”

The lack of clarity on succession at two of the largest banks in the world does not look good. It seems to me that Gorman and Blankfein did it right – put two candidates in the queue, mostly get out of the way and let them get out of the way.

Unless they want to end up with regrets, like Welch, it’s time for Dimon and Moynihan to make it clear who’s in line to follow them. “[When] you choose a CEO, you choose the fate of a business, ‘Welch told me with more than a little sadness before he passed away.

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