With New CFO, JPMorgan Turns Page on “London Whale”

America's biggest bank appoints Marianne Lake to the post. Unlike her predecessor in his last few months on the job, she'll report to CEO Jamie Dimon.
David McCannNovember 20, 2012

Back in July, an executive shuffle left JPMorgan Chase CFO Doug Braunstein reporting not to CEO Jamie Dimon but rather to a fast-rising but still lower-ranking officer, Matt Zames. At the time, it wasn’t clear whether the new reporting structure was more a recognition of Zames’s status as a possible eventual successor to Dimon, or a rebuke of Braunstein following the “London Whale” fiasco that brought $6.2 billion in trading losses.

With Monday’s appointment of Marianne Lake as the new CFO of America’s biggest bank, the pendulum swings well toward the rebuke side of the debate. Lake, expected to take on the post in the first quarter of 2013, will report to the CEO, as do most finance chiefs in the country. Braunstein will become a vice chairman of JPMorgan, where he will “focus on serving top clients of the firm,” the bank said in a press release.

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Lake, 43, has been a rising star since arriving at JPMorgan in 2004. Moving over from PricewaterhouseCoopers, she has climbed from senior U.K. financial officer, to a role managing global finance infrastructure and controls, to global investment bank controller, to CFO of the consumer and community banking unit.

JPMorgan did not respond to requests for an interview with CFO, but Lake told Bloomberg News that “it’s not at the top of my mind to make sweeping changes right now.”

She’s kept a fairly low profile outside of JPMorgan. Several analysts that follow the bank told CFO they don’t know anything about her. But two executive recruiters said they’ve regarded her for years as a candidate for a major financial services CFO position.

David Treussard, leader of the financial services practice at DHR International, says Lake has a reputation within JPMorgan as an outstanding people manager with both broad and deep knowledge of the bank’s businesses. “This is a great move by JPMorgan,” he says.

A partner in the financial services practice at one of the largest executive recruiting firms, who says he knows Lake “very well,” calls her “the fastest talker I know.” But he doesn’t mean that as slang for someone who influences people through deception. “What a fast mind,” the recruiter says. “It’s rapid fire. Talking to her, you can see her brain is always working a million miles an hour.” And, despite her vow not to make big changes too fast, the recruiter observes that she’s “a huge driver of change with incredible energy. And most importantly, she’s got a personality that meshes well with Jamie Dimon.”

While companies often prefer to fill CFO posts with top finance chiefs from other companies, Lake’s appointment adheres to the financial services sector’s tendency to do the opposite, Treussard says. He points out that the CFOs of Morgan Stanley, Bank of America, and Goldman Sachs – respectively Ruth Porat, Bruce Thompson, and the recently appointed Harvey Schwartz – were also promoted from within.

Treussard also opines that Lake’s appointment, on top of Porat’s in 2010, is an important event for women in the banking industry.

“Now two of the six largest U.S. banks have CFOs who are women,” he says. “Now women in banking can see people who have stayed around for a long time and are doing really great. Banks are very good at hiring women at the beginning of their careers – it’s about 50-50 with men ­– but not so much at retaining them to the point where they can contend for top executive positions. It’s such a stressful industry with such long hours that when women decide to start a family, they often don’t go back into banking.”

Still, according to a recent study by Catalyst, a nonprofit organization that helps women succeed in business, 16.8% of executive officers in the financial services industry are women. And as shown in a recent report from recruiter Crist|Kolder Associates, women comprise about 10% of CFOs for financial companies that are in either the Fortune 500 or S&P 500.