January 7, 2008
BOSTON (AP) – At age 77, Edward “Ned” Johnson III can’t keep this pace up forever. But it sometimes seems the Fidelity Investments chief hopes to.
Johnson’s tenure running the nation’s largest mutual fund company has spanned three decades – the only other change of leadership in 61 years at Fidelity was when Johnson took over for his father. But the job has become increasingly complex as Johnson tries to fend off rivals’ gains and streamline operations, while outsiders’ calls for governance reform grow louder.
“He hasn’t missed a beat, and a lot of people have crumbled while he’s still going 100 miles per hour,” says Eric Kobren, a former Fidelity employee who edits the independent money advice newsletter Fidelity Investor. He suspects Johnson “isn’t going anywhere soon.”
The notoriously insular company isn’t publicly offering a timeline for leadership change, or disclosing details of a succession plan it says it has in place, even amid some suggestions that the uncertainty could be hurting Fidelity’s competitiveness.
The heir apparent – Johnson’s 46-year-old daughter, Abigail Johnson – has not been confirmed as such, and some observers question whether she even wants the job. And a flurry of management and organizational changes this year eliminated two other successor candidates from contention.
Outsiders still regard Abigail Johnson as an odds-on favorite for the top job, by virtue not only of her bloodline, but the diversity of management positions she’s held overseeing Fidelity’s increasingly far-flung financial services.
But her father still is firmly in charge – and by all accounts, apparently healthy.
“Nothing has told me that he’s anxious to pass the baton very quickly, unless something were to develop with his health, or some family issue,” said Patrick McGovern, a friend who occasionally dines with Johnson and is founder and chairman of IDG Group, a Boston-based technology research and publishing firm.
Fidelity rarely makes executives available for interviews, and declined requests from The Associated Press. A recent statement issued by Ned Johnson on succession planning described a continuing process to “pass the corporation on in good operating order to the next generation of executives at the appropriate time.”
Whoever eventually succeeds Johnson, big changes are expected at the Boston-based company that’s a huge force on Wall Street, as the largest provider of Americans’ workplace retirement savings plans and a manager of nearly $1.6 trillion in assets.
Observers say Johnson’s successor won’t have as much power as he has wielded filling the chairman and chief executive roles since 1977 – posts that could be split between two people when his replacement is named. And the private firm will face increasing pressure to operate more like a publicly held company, with greater attention to open governance, cost-cutting and short-term financial results.
“Whoever follows Ned Johnson can’t run it the way he has. The old model doesn’t work anymore,” said Bruce Raynor, co-chairman of the Council of Institutional Investors, representing public, labor, and corporate pension funds, and general president of Unite Here, a union of hospitality and textile workers.
For the rest of this insightful story about Ned Johnson, the CEO of Fidelity, click here: http://www.biz-journal.com/articles/2008/01/03/national/doc477dc20f2a177611413230.txt.
The story, which was written by AP, appeared in the January 4, 2008 issue of The Northwest Herald (www.nwherald.com).