Fidelity Investments is the second-largest mutual-fund firm in the United States with somewhere in the neighborhood of $2 trillion under management. Only the Vanguard Group has more under management in the mutual-fund sector.
Edward “Ned” Johnson III, who is 84 years old and has been CEO since 1977 has finally decided to name his successor and whom better than his daughter to take his place? Fidelity has always been a family run company, Edward “Ned” Johnson III took over the CEO job from his father who founded Fidelity in 1946 after the end of World War II.
Her history and the memo
The company’s website and the biography of Ms. Johnson, 52, says that she first worked as an equity research analyst at Fidelity in 1988. She has also held a number of leadership positions at Fidelity, most recently in charge of Fidelity’s retail, workplace, and institutional businesses.
According to an internal memo sent by Edward “Ned” Johnson today that was read by the Wall Street Journal, Johnson wrote,”…Abby Johnson has agreed to become Chief Executive Officer of Fidelity, reflecting a further step forward in our leadership succession plan. Abby will retain her role of President and I will continue to serve as Chairman of the Board. Along with our senior team, we will work together to strengthen Fidelity’s industry leadership and to innovate in ways that enhance the experience we provide to our customers.”
Fidelity succession questions answered
Ms. Johnson was once the largest single shareholder at the firm with about 25% of the company, the family holding another 24% through trusts and individually with the understanding that the family would vote as a bloc. In October of 2005, Ms. Johnson sold a “significant” portion of her shares to family trusts and her commitment to the firm was immediately questioned. The possible succession was equally questioned but has definitely been answered today.