Corrected: JPMorgan reshuffles leadership in succession clue

NEW YORK - JPMorgan Chase & Co has reshuffled the leadership at its investment bank, naming a new chief executive who could eventually succeed Jamie Dimon as head at the No. 2 U.S. bank, in a shake-up that surprised many analysts and investors.

JPMorgan said Jes Staley, current head of the bank's key asset management unit, will become the chief executive of the investment bank. Dimon, 53, is not expected to leave any time soon, but Staley's promotion makes him a front- runner to succeed him, a person close to JPMorgan said.

"This sends the message that they have a deep bench and executives in place in the event Jamie Dimon were to depart," said Bill Fitzpatrick, an analyst at Optique Capital Management.

Making way for Staley to take over at the investment bank, co-CEO Bill Winters will leave the firm and the other co-CEO, Steve Black, will stay on only for the transition as executive chairman of the unit.

"Jamie is a little young to be thinking about succession at this point," said Nancy Bush, an analyst and founder of NAB Research.

Yet Dimon joins other Wall Street banks in firming up succession plans as the easing of the financial crisis gives him time to think about the future and as regulators step up scrutiny of bank governance.

"The timing was right to begin the succession process," Dimon said in a statement.

Staley, 52, has held high-profile roles since he joined the bank 30 years ago as an economics graduate from Bowdoin College. He spent 20 years in the investment bank -- including nine years in the Latin America division -- and headed equity capital markets before becoming CEO of the private bank and then taking on the asset management operation.

Among other achievements, Staley persuaded Dimon in 2004 to take a stake in hedge fund Highbridge Capital, which has seen assets under management triple over the past five years, Duff McDonald wrote in his recent book about Jamie Dimon, "Last Man Standing."

Mary Callahan Erdoes, 42, chief executive of JPMorgan's private bank, succeeds Staley as head of asset management.

WINTERS OUT

Winters and Black were deeply involved in the acquisition and integration of Bear Stearns Cos. Like Dimon, they did not receive a cash bonus for last year.

At a meeting behind closed doors in London last week, Winters blamed "greedy bankers, investors and borrowers" for the financial crisis, according to a U.K. newspaper.

Winters and Black have been investment bank co-CEOs since 2004 -- something of a record on Wall Street, where appointing co-heads often creates a power struggle, leaving just one head standing. Winters focused mainly on credit and trading from the London office, while Black, based in New York, focused on investment banking.

JPMorgan's investment bank largely avoided the complex debt securities linked to subprime mortgages that caused large losses for its rivals over the last two years. At the same time, it has become a major force for both debt and equity underwriting, topping third-quarter "league tables" according to preliminary data.

Winters' plans were unclear, but two people who have worked with him said his strong background in management and his experience during some of the worst days of the financial crisis will stand him in good stead if he seeks a management job elsewhere.

SUCCESSORS

Dimon, a former protege of Citigroup Inc architect Sandy Weill, is regarded as a star on Wall Street who has led JPMorgan through face-changing acquisitions, including Bear Stearns and failed Seattle thrift Washington Mutual last year.

Dimon, ousted unceremoniously from Citigroup in 1998, may be looking to avoid the errors of his former mentor. Weill said in McDonald's "Last Man Standing," "I think I made a very bad decision on succession." Citigroup has struggled since Weill's departure.