Another high-ranking executive at JPMorgan Chase is departing; this time, it is the man who had been considered a possible successor to CEO Jamie Dimon.
Michael Cavanagh, who was co-CEO of the company’s corporate and investment bank, is joining The Carlyle Group to become co-president and co-chief operating officer.
“While we would prefer he stay at the firm, we are glad he’s going to a valued client in Carlyle,” Dimon said Tuesday in a news release.
Cavanagh, 48, joined the global bank in 2004, and helped guide it through the financial crises that washed over Wall Street several years later. He came to be known as Dimon’s “Mr. Fix-it.” He said in a prepared statement from the bank that “it was not without a lot of soul-searching that I decided it was time for me to take my career in a different direction.”
Cavanagh joins the ranks of top executives who have departed JPMorgan in recent years. They include Charlie Scharf, who left to run JPMorgan’s private equity arm Equity Partners in 2011, and who is now CEO of Visa. Heidi Miller left at the same time, after having run the company’s international operations.
Jes Staley was another JPMorgan executive widely seen as a possible CEO. But he left last year for BlueMountain Capital, after more than 30 years with the bank. And in April 2013, co-chief operating officer Frank Bisignano left to become CEO of payment processor First Data.
JPMorgan’s executive bench was also thinned by the 2012 departure of Ina Drew. Drew, who had been chief investment officer, left within days of the disclosure of the bank’s $6 billion “London Whale” trading loss.
Gerard Cassidy, a banking analyst with RBC Capital Markets, noted that JPMorgan’s profits have risen during the period when executives have been leaving, suggesting that the company has a strong pool of replacements to draw on.
Political scrutiny may be a factor, he said. Pay for bank executives has been closely watched since the financial crisis in 2008, and banks still need the Federal Reserve’s approval to increase dividends or buy back stock. The latest round of approvals or rejections is due from the Fed on Wednesday.
Seven-figure paychecks are going to get heavy scrutiny, Cassidy said, adding, “Why not go into the private equity world, where you can earn significantly more money and not worry about taking the wrath of regulators and politicians?”
Cavanagh’s departure leaves Daniel Pinto as sole CEO of JPMorgan’s corporate and investment bank.