Top deck reshuffle at Fidelity clouds CEO succession plan

BOSTON: An executive shake-up at Fidelity Investments brings two very different women to centre stage at the world’s biggest mutual fund manager, but it is far from certain who will rise to the top job.

Ellyn McColgan, 53, was promoted on Thursday to oversee distribution and operations after five years at the helm of Fidelity’s large, fast-growing brokerage business. She is seen as the rising star in the family-run company.

She shares her new role with Abigail Johnson, 45, the publicity-shy daughter of long-time chairman and chief executive Edward “Ned” Johnson, 76, whose family built Fidelity over six decades and still controls 49% of the Boston firm.

The reshuffle, at a time when Fidelity is looking to reverse a loss of market share in mutual funds, included the retirement of 23-year veteran Robert Reynolds as vice chairman and chief operating officer. Speculation has long simmered over who CEO Ned Johnson will pick as his successor. Reynolds was once a hot favourite until virtually ruling himself out last year by attempting to become the US National Football League Commissioner.

“The succession issue still is somewhat of an open question. Until someone’s actually coronated, you are not going to know,” said Ben Phillips, managing director at investment bank Putnam Lovell NBF Securities. The reshuffle shines a spotlight anew on the younger Johnson, once considered the likely successor as she rose through the ranks with the family name.

That talk faded two years ago, however, when she was moved from running the high-profile investment management division as its performance faltered. Because Abigail Johnson was not automatically chosen successor then, there’s no guarantee she will be appointed to the top job now, industry analysts said. “I don’t think Mr. Johnson has made up his mind,” said Geoff Bobroff, a fund industry consultant.

“This is just another team. And out of this may come a successor or may not,” he said. Jim Lowell, editor of independent newsletter Fidelity Investor, expects a decision on the top job to depend on how the younger Johnson and McColgan work together.