Fidelity watchers ponder succession at the family firm

Although Fidelity executives last week quelled rumors about the potential departure of president Rodger Lawson, observers noted that the larger question about the firm is who will take over when chairman and chief executive Edward C. “Ned” Johnson III, 79, retires.

“Mr. Lawson is a very important person and a very powerful player. But he does not hold the same clout at the company as [Mr.] Johnson,” said Matthew Noll, a senior credit officer at Moody’s Investors Service of New York.

Some observers speculate that Mr. Johnson’s daughter, Abigail, could be her father’s successor.

She is president of Fidelity’s personal and workplace investing division. Ms. Johnson, 47, also serves as vice chairman of Fidelity’s parent company, FMR LLC of Boston.

“If Abby wants to run the firm, what would keep her from doing it?” said John Bonnanzio, editor of the Fidelity Insight newsletter, which is based in Wellesley Hills, Mass.

“At some point, when Ned steps back, it’s believed that Abigail would assume that role,” said Burton Greenwald, a Philadelphia-based mutual fund analyst.

As for Mr. Lawson, analysts are confident that the fund giant has a succession plan in place for his position.

“We are satisfied that the company is adequately prepared to handle a key-man turnover,” Mr. Noll said.

“Some periodic rotation of the president’s title is certain to be expected in our view. But the departure of Mr. Lawson, at any time, is not a material event because there is no reason to believe that the company cannot find a person of an adequate talent level to handle that job,” Mr. Noll said.

“But who knows what the marketplace will be in the future? Maybe it would become publicly held; I don’t think anyone could speculate on that over the long term,” Mr. Bonnanzio said.

In an interview last week with the Associated Press, Mr. Lawson, 62, suggested that changes could be in store for the 63-year-old company’s structure as a privately held firm. The Johnson family owns 49% of the company, with the rest held by key company employees.

“The question is, absent Ned Johnson, will the succeeding generations have the appetite to remain independent. I think 10 years from now there is a good probability that Fidelity will become part of a larger international organization,” Mr. Greenwald said.

“We of course have succession plans,” Fidelity spokesman Vin Loporchio said.

“We focus very extensively on succession planning at all levels of the firm. And of course, that includes Rodger’s position,” Mr. Loporchio said.

“As Rodger has stated many times, he will stay with the company in one role or another as long as the company needs him,” he said. “Mr. Johnson has no plans to retire at this time,” Mr. Loporchio added.

E-mail Sue Asci at [email protected].

Related Topics: Fidelity Investments, ING Group