Abigail’s accession at Fidelity could trigger ‘senior departures’
Abigail Johnson’s appointment as chief executive of Fidelity Investments, the company founded by her grandfather in 1946, could trigger “many senior-level departures” from the fund group despite her accession being managed carefully.
Ned Johnson, the chairman of Fidelity, who transformed the company into a powerhouse of the fund management industry, handed the title of chief executive to his daughter, Ms Johnson, last week.
One senior asset management consultant who counts Fidelity among his clients said: “The company’s complexion will change. The business will see many senior-level departures of people who had a special rapport with Ned Johnson.”
Just a few days after Ms Johnson’s appointment the president and chief executive of Fidelity-owned Pyramis Global Advisors, Mike Jones, announced his intention to leave the fund group, just two and a half years into the job.
Jeanne Branthover, head of the global financial services practice at Boyden, the headhunters, in New York, said recruiters will take this opportunity to approach the senior management team in the hope of finding “someone unhappy with the transition”.
She said: “In most cases when a new CEO is moved internally there often are a few senior executives that depart not happy with the change.”
Fidelity Investments, which has suffered $9.9bn of net outflows this year according to research provider Morningstar, declined to comment on whether Ms Johnson’s succession would trigger other personnel changes, but said Mr Jones’s departure from Pyramis was a previously planned announcement.
Ms Branthover conceded that, because Ms Johnson’s appointment was carefully choreographed and effectively formalised arrangements that had already been in place, the potential loss of staff would be limited.
“In this case we do not expect to see so many departures since this was well planned,” she said. “Ned made sure this transition would be as smooth as possible.”
Ms Johnson first joined Fidelity in 1988 as an equity analyst and portfolio manager, after gaining an MBA from Harvard Business School. Since then she has worked in almost every part of the Boston-based group.
Katie Reichart, a senior analyst at Morningstar, who monitors Fidelity on behalf of the research provider, added: “Any time a new leader takes over it is possible some personnel changes might occur. But considering Ms Johnson has overseen all of Fidelity’s underlying businesses since becoming president in 2013, she has already been working closely with senior executives at the firm. The writing was on the wall that she would eventually hold the CEO position.”
In a memo to staff last week Mr Johnson, who remains as chairman, said: “In my role as Fidelity’s chairman and CEO, I have always said that our best days are ahead of us, largely due to the commitment and contributions from all our associates. I believe this has never been truer than it is today.”