Succession: Is the Jamie Dimon era at JPMorgan chase nearing its end?

JPMorgan Chase (NYSE:JPM) held its annual Investor Day on Monday, but the events of the day were overshadowed by comments made by CEO Jamie Dimon on his future with the company.

Dimon, age 68 and currently the longest-tenured big-bank CEO, was asked about succession planning in the question-and-answer portion of the event, and his response made headlines.

Typically, Dimon has not responded seriously to such questions, joking that it was always five years away.

However, he gave a different answer on Monday, saying, “The timetable isn’t five years anymore.”

Succession from in house?

Dimon has been running JPMorgan Chase since 2006, and in that time, the bank has been the best, most well-run major bank in the world. His philosophy of building a “fortress balance sheet” has been the foundation on which JPMorgan Chase has been built, allowing it to navigate various market and economic environments better than its competitors.

Over the last 10 years, JPMorgan stock has had an average annualized return of 14%, and this year, it has surged 15.4% year to date.  

Dimon did not elaborate on the bank’s succession plans, but saying the timetable isn’t five years any more suggests he will retire within the next few years.  

“I still have the energy I’ve always had, I think when I can’t put on the jersey or any given full thing, I should leave,” Dimon said, reported CNN.

However, the CEO did give a sense that internal discussions are underway.

“We’re on the way; we’re moving people around,” Dimon said, according to Reuters.

The leading candidates to replace Dimon are all in house, according to reports. Among those in the running are Jennifer Piepszak and Troy Rohrbaugh, who are co-CEOs of the commercial and investment bank; Marianne Lake, the CEO of consumer and community banking; and Mary Erdoes, the CEO of the asset and wealth management business.

Analysts at Bank of America Securities have forecast a late 2025 or 2026 departure for Dimon, but of course, that remains to be seen.

JPMorgan stock hits all-time high

After hitting an all-time high of $205 per share last week, JPMorgan Chase’s stock price tumbled about 5% on Monday when the news about Dimon broke. However, it began moving higher on Tuesday, rising about 2% to $199 per share.

At the Investor Day on Monday, JPMorgan Chase projected $91 billion in net interest income in 2024, which is higher than the previous estimate of $90 billion. However, it also raised its expense outlook to $92 billion from $85.7 billion, with $1 billion of that increase stemming from a donation to the bank’s foundation.

JPMorgan Chase’s technology expenses are expected to be $17 billion in 2024, up from a projected $15.5 billion in previous guidance. This reflects investments in modernizing the bank’s systems to operate more efficiently.

JPMorgan Chase also said it has plenty of excess capital for stock buybacks, but it is approaching buybacks with caution. Dimon later added that it didn’t make a lot of sense, given JPMorgan Chase’s high stock price.

Even with its high price, the bank is still trading at a low valuation with a P/E ratio of 11. It’s still a good, solid buy because Dimon isn’t going anywhere any time soon, and his successor has undoubtedly been learning from one of the best in the business.