File this breaking news under, “I told you so”. Abigail Johnson has been in de facto charge of running Fidelity for more than a handful of years (as I pointed out when she became Fidelity’s CEO in October 2014). By mid-December, her leadership of the company will be made formal.
Fidelity has just announced that, after nearly 60 years at Fidelity, Edward C. Johnson III is retiring, and that Abigail Johnson will succeed him as chairman of FMR LLC, Fidelity’s parent company. These changes will be effective in early December. As chairman and chief executive officer, Abby will have responsibility for the management of all FMR LLC businesses, including Fidelity Financial Services and Fidelity’s other diversified businesses and investments. This expansion of responsibilities is a natural progression of Abby’s 28-year career at Fidelity, in which she has taken on increasingly more challenging and complex roles.
Mr. Johnson will become chairman emeritus. He will maintain office hours at 245 Summer Street in Boston, and continue to consult periodically with Abby and Fidelity’s Board of Directors.
The move has no impact on Fidelity investors; Abigail is as a capable a leader as they come, and her father knows he hands the reins on to someone who has proven her constant value and her lasting worth.
For Fidelity culture, this final gesture is more than the end of a chapter; it’s the end of an era. The most comparable event was when Jack Bogle stepped aside from Vanguard (though I bet the majority of Vanguard investors, and maybe even Jack himself, still think he’s running that shop).
Abby Johnson Biographical Information
Abby Johnson became CEO of FMR LLC in October 2014. Prior to that, she served as president of the firm. Abby began her career at Fidelity in 1988 and spent her initial years as an analyst and portfolio manager gaining experience across a diversity of funds, and learning the fundamentals of the investment business, which she went on to lead in 2001, as head of Fidelity’s Asset Management division.
In subsequent roles Abby managed all aspects of Fidelity’s distribution business, expanding both its scale and scope, based upon the needs of its 25 million customers, serving as President of the company’s Personal, Workplace and Institutional Services organization. Under her leadership, Fidelity’s revenue has grown by 27 percent in the past five years, and assets under administration—an important indicator of the confidence clients have in Fidelity—have increased 58 percent to $5.5 trillion today.
(Note: Revenue growth figure is based on year-end 2010 through year-end 2015; AUA and AUM figures are based on year-end 2010 through Oct. 31, 2016.)
Edward C. Johnson III Biographical Information
The company was founded in 1946 by Edward C. Johnson II, Ned Johnson’s father. Ned Johnson served as chief executive officer of Fidelity from 1977 to 2014.
Mr. Johnson joined the firm as a research analyst in 1957. He managed Fidelity Trend Fund from 1958 to 1967 and was Fidelity Magellan Fund’s first portfolio manager, running the fund from 1963 to 1971. Mr. Johnson assumed executive control of the company in 1972—when assets under management were $3.9 billion—and quickly established a reputation as an innovator within the financial services industry. He pioneered the direct marketing of mutual funds in the 1970s, and made Fidelity the first company to offer check-writing on money market funds. He also broke new ground in developing technology-based customer services such as 24-hour service with an in-house representative.
Born in 1930, Mr. Johnson received a bachelor of arts degree from Harvard College in 1954 and has honorary degrees from Bentley College, Boston University, Hobart and William Smith Colleges and Northeastern University.