By Elizabeth Dilts Marshall
NEW YORK (Reuters) – JPMorgan Chase & Co <JPM.N> CEO and Chairman Jamie Dimon is recovering from emergency heart surgery done on Thursday morning, with two deputies taking over as he recuperates, the largest U.S. bank said.
Dimon, 63, experienced a tear in his heart’s main artery, which was detected early and treated successfully, JPMorgan said, publicly releasing an internal memo.
He is “awake, alert and recovering well,” according to the memo. The bank did not disclose where Dimon is being treated.
The bank’s co-presidents and co-chief operating officers, Daniel Pinto and Gordon Smith, sent the message to all employees, and are running JPMorgan as Dimon recovers.
Dimon has been CEO of JPMorgan for over a decade, and is a larger-than-life figure on Wall Street.
He has fashioned himself into a voice of the industry and become more active in Washington in recent years. He often uses his platform as head of the country’s biggest bank to opine on issues that fall outside that scope, including immigration, education and healthcare.
At various times, Dimon has also mocked financial regulators, cursed during public appearances and joked about becoming U.S. president.
During his time at the helm of JPMorgan, Dimon has turned the bank into a global behemoth, with leading positions in many key businesses, through crisis-era acquisitions as well as opportunistic market-share grabs.
His most vulnerable time as CEO may have come after a trader known as “the London Whale” caused billions of dollars’ worth of losses from derivatives positions in 2012 that management overlooked.
Industry analysts characterized Pinto and Smith as capable hands at the helm of JPMorgan, but noted that Dimon’s health scare raised new questions about who will succeed him for the long term. He also battled throat cancer after a diagnosis in 2014 that sidelined him for several months.
“This will definitely get the board to step up their efforts to put in place a succession plan because it is not going to be easy to replace someone like Dimon,” said a Hong Kong-based consultant who works with the bank. “They will have to cast their net very, very wide and will have to look both internally and externally.”
The condition for which Dimon had surgery on Thursday is called an acute aortic dissection, where the inner lining of the aorta tears away from the outer edge of the tube.
It is a serious, potentially deadly event that, left untreated, can lead to a heart attack or the aorta collapsing, said Dr. Gabriele Di Luozzo, director of thoracic aortic surgery at Mount Sinai Morningside hospital in New York.
During surgery, about 6-8 inches of the aorta nearest to the heart is replaced typically with a synthetic tube, said Di Luozzo.
“This is a major operation,” Di Luozzo said. “In a typical elective surgery (to replace) an aorta, the risk of death is in the 2-3% range. But when you have an emergency operation it can be as high as 20%.”
If treated in time, patients typically spend a week in hospital followed by several weeks recovery at home, he said.
Dimon’s surgery was successful and bank executives said they expect him to return to work.
When Dimon was going through cancer treatment, he curtailed travel and made fewer public appearances, but eventually recovered and got back to work.
Questions about who might succeed him have existed for years, as many executives who were viewed as potential successors left out of impatience or for other opportunities.
Pinto and Smith are relatively close in age to Dimon, who said in promoting them in 2018 that he wanted to stay in the job for five more years.
Two other people often talked about as potential CEOs are Marianne Lake, who runs JPMorgan’s consumer business, as well as Chief Financial Officer Jennifer Piepszak.
“The bottom line is that Mr. Dimon is often viewed as a steady hand for the banking industry during turbulent times (like we are in now),” KBW analyst Brian Kleinhanzl said in a note to clients, referring to recent market chaos and economic concerns stemming from the coronavirus outbreak. “Not having him at the helm of JPMorgan is a modest negative.”
(Reporting by Elizabeth Dilts-Marshall and David Henry; Additional reporting by Sumeet Chatterjee in Hong Kong; Writing by Lauren Tara LaCapra; Editing by Peter Cooney and Muralikumar Anantharaman)