Fidelity promotes Abigail Johnson to No. 2 role
Analysts see promise of top job in future
Fidelity Investments has elevated Abigail P. Johnson to the number two role at the Boston investment giant, reporting to her father, Edward “Ned” C. Johnson 3d.
The younger Johnson, 50, will now have the added title president of Fidelity Financial Services, “consolidating all of the company’s core businesses under her leadership,” the company said. The promotion is the clearest sign yet that Abigail Johnson, who has been groomed for years to potentially take over the company, is firmly on target to one day run Fidelity.
Her father, 82, remains chief executive and chairman. Other business heads at the company will report to Abigail Johnson, including Ronald O’Hanley, who has been her equal in the corporate hierarchy since he joined the company in 2010.
“During her 24-year career at Fidelity, Abby has gained a breadth of experience overseeing many of the divisions that comprise Financial Services,” her father said in a news release. “She has demonstrated an ability to drive change and innovation in business practices on behalf of our customers. She is well suited for this important position.”
Abigail, one of three Johnson offspring, joined Fidelity in 1988 after spending two summers as a research analyst at the firm. Since then, she has done virtually every job at the firm that her grandfather started and her father turned into one of the largest mutual fund managers in the world.
Fidelity is the nation’s second-largest mutual fund manager and the largest provider of 401(k) retirement plans. The privately held firm reported $12.8 billion in revenues last year, and $3.3 billion in operating profits.
Abigail Johnson went from managing mutual funds to overseeing most of the company’s various lines of business, from brokerage to retirement plans. She is the company’s largest owner and the vice chairman of FMR, the holding company for the Fidelity businesses. She is also chairman of the board of trustees of Fidelity’s fixed income and asset allocation funds.
Although publicity shy like her father, Johnson is well-liked inside Fidelity and considered down-to-earth for the 33d wealthiest American and one of the most important women in business. In person, she comes across as serious, smart, and reserved.
While speculation has for years run deep in Boston business circles and across the industry about who would run Fidelity after Ned Johnson, people who know the firm well say it’s hard to imagine it hasn’t always been the plan for his daughter to step into the job. Still, the news appeared to clear up any lingering doubt.
“I think having clarity in leadership is always helpful,’’ said John Bonnanzio, editor of Fidelity Insight, a Wellesley investment newsletter that tracks Fidelity. And while there’s been a line of disappointed executives over the years who thought they might steal the job away from the heir apparent, Bonnanzio said O’Hanley and other senior executives at the firm today have been aware of the plan for Johnson to assume control.
“This was a foregone conclusion when [O’Hanley] came two years ago,’’ Bonnanzio said. “She certainly has had a lot of training, which is a good thing. It’s a large and complex business.”
Whether Johnson will now have the authority to make business decisions without her father’s approval is not known. By all accounts, Ned Johnson remains actively engaged in the business, is sharp and in good health, and routinely travels internationally on Fidelity business.
As her responsibilities have grown over the past few years, Abigail Johnson has made more frequent public appearances, at industry gatherings and most visibly in April, at a Greater Boston Chamber of Commerce event honoring her father and family as “Distinguished Bostonians.” It was a rare moment in the spotlight for a family that shuns publicity and news coverage. So closely do the Johnsons hew to their Yankee leanings, they engage in millions of dollars of philanthropy annually that they rarely make public.
The Johnsons wield major power from Wall Street to Washington, most recently with Fidelity helping to derail increased regulations of money market funds by the Securities and Exchange Commission. But these stewards of $1.6 trillion in savings around the world keep a profile so low that when they do speak in public, their every word is parsed.
At the Chamber event, Abigail Johnson hinted at the enormous shoes she may one day have to fill, noting her father’s legendary devotion to customer service. She called him “a man consumed with passion and endless energy for fixing things.’’