Fidelity sets a date for Rodger Lawson’s exit

Fidelity Investments President Rodger Lawson is retiring at the end of March after two-and-a-half years reorganizing a company that's now on better financial footing, but also about 9,000 employees smaller than when he arrived.

Fidelity Investments President Rodger Lawson is retiring at the end of March after two-and-a-half years reorganizing a company that’s now on better financial footing, but also about 9,000 employees smaller than when he arrived.

Fidelity on Wednesday announced the 63-year-old’s plans to step down from the No. 2 post at the nation’s largest mutual fund company, which manages $1.2 trillion in fund assets. But Fidelity, which has broadened its financial services far beyond mutual funds, left unanswered who will replace Lawson’s boss.

At 79, Edward “Ned” Johnson III remains CEO and chairman. He’s held those titles since 1977 at Boston-based Fidelity, in which his family owns a 49 percent stake. Key employees own the rest.

Speculation about who will replace Johnson and when — including the possibility that his daughter, Abigail Johnson, will be the successor — has persisted for years. In announcing Lawson’s retirement on Wednesday, Fidelity had little to offer on Ned Johnson’s future. Fidelity has a succession plan, but the privately held company hasn’t disclosed those details.

“He will be around for a while,” Lawson told The Associated Press, noting that Johnson “will be a young 80” when his birthday comes up in June.

Lawson, joined by two other executives in an interview that didn’t include Johnson, said he will remain an adviser to the company and Johnson. He has no new job lined up outside Fidelity, and plans to sharply cut his work schedule.

His departure isn’t a surprise. When Johnson tapped Lawson for the president’s post, Lawson said he didn’t expect to stay more than a few years.

Lawson helped guide Fidelity through market turmoil that forced the company and many rivals to cut back as plunging asset values ate into revenue from money-managment fees.

“It’s been a fairly brutal two-and-a-half years,” Lawson said.

Lawson’s July 2007 appointment marked a return to a company where he had been a manager in the late 1980s and early 1990s, before leaving to join Prudential Financial Inc.

In his second stint at Fidelity, Lawson reorganized a company with a wide swath of financial service businesses that had 20 million individual investors and institutions.

The company in 2007 counted more than 46,000 employees. Now, Fidelity’s total is closer to 37,000, after a series of layoffs completed last year.

Fidelity’s more than 400 mutual funds have been spotty in recent years, and there is also the competition from rivals such as Vanguard Group and Capital Group’s American Funds.

Lawson responded by demanding and getting greater accountability, tying managers’ compensation closely to financial performance within business units, and the investment performance of its fund managers.

Before Lawson became president, Fidelity “was sort of becoming like a bank where people show up for their paycheck,” said Jim Lowell, a former Fidelity employee who runs the independent newsletter FidelityInvestor.com. “Under Lawson, Fidelity once again became a place where performance mattered.”

“He really leaves Fidelity in better shape then when he came in as president,” Lowell said.

For now, Fidelity’s nine-member executive committee will collectively assume Lawson’s duties. That group includes Abigail Johnson, who heads the Fidelity unit in charge of personal and workplace investing. It’s uncertain whether Ned Johnson will name Lawson’s successor, or leave the president’s post vacant.

Now that he’s leaving as president, Lawson said he will no longer be influential in guiding executive appointments, including his own possible replacement, or Johnson’s.

But Lawson said he believes the any new executives are likely to come from inside Fidelity.

“The executive committee will really run this place on a day-to-day basis, and it’s very stable,” Lawson said. “It’s from this group that the future leadership of the company will come.”