She is the heiress without airs, the billionaire who breaks type.
Abigail Johnson, newly installed as chief executive of Fidelity Investments, is known to fly commercial when it’s more convenient and to sometimes cool her heels at the car rental counter with the rest of us. She lives in Milton in a (very nice) house when she could live anywhere at any price, and she has been a regular on the suburban sports sidelines with other parents. She doesn’t exude entitlement, when she easily could.
There’s a reason for that.
From the outside, it’s as if she’s been on a foredestined path, a kind of bright green line — as in the familiar Fidelity ads — that took her inexorably from low-level jobs to the summit, to wealth and power she might well take for granted.
But that’s not how the Johnson family dynasty works, and, more important, it’s not how Abby Johnson works.
She toiled over 26 years, patiently working a succession of positions, from the obscure to the increasingly prominent, until her father decided that, at 52, she was finally ready to run the Boston firm his own father created in 1946.
She rose while taking to heart the message her legendary father repeated more times than she could count: Always strive to be better, he told her. No matter how well you might seem to be doing, your job is never done.
It was a message evidently strong enough to keep the investment industry’s most powerful woman humble. It also resonates at Fidelity today.
Long the unbeatable giant among mutual fund firms, built with ingenuity and boldness by Edward C. “Ned” Johnson 3d, her fiercely private father, Fidelity was surpassed four years ago by the Vanguard Group. It’s now, despite $2 trillion in funds under the company’s control, number two in an industry the Johnsons essentially invented.
So Abigail Johnson has a challenge her father and grandfather never had. Boston and the industry wonder: What will she do with it?
“It’s a challenge for anyone to follow Ned Johnson,’’ said Robert Reynolds, a former Fidelity chief operating officer who now runs crosstown rival Putnam Investments. Perhaps even more so for someone who has lived in the shadow of the man who remains chairman.
While further tests of her leadership will come, Reynolds said, “She’s definitely ready for this job.”
Abby, as she is known to people close to her, is the world’s seventh-wealthiest woman, with a fortune estimated at $17 billion. To get there, she had to outlast a string of competing executives, many of whom coveted the chief executive title.
“She had an advantage other people didn’t have. She lived with him,” Reynolds said. “She had access to him and still does. She’s done a lot of things at Fidelity and she’s been around Ned. You just can’t help but learn from that.”
Already, she’s putting her imprint on the company in ways large and small. When her father sent out an understated memo on Columbus Day to announce her promotion, he also unveiled two new picks for the parent company’s board, both of them Abby loyalists.
“It’s Abby starting to reshape the board for her purposes going forward,’’ said Michael Wilens, one of the new directors and president of Fidelity’s venture, charitable, and other businesses outside of mutual funds and brokerage. “It’s a very carefully orchestrated transition so that it doesn’t disrupt the operation.’’
Two years ago, the younger Johnson moved Fidelity’s headquarters closer to the Seaport district, abandoning the staid 82 Devonshire St. building where her father’s office had been since the 1970s. The multimillion-dollar renovation of 245 Summer St., near South Station, features high-tech displays, innovation labs, and a spacious lobby with an espresso bar.
Her own office, if not lavishly appointed by the standards of some chief executives, is roomy enough to be called the “throne room” by some employees.
Disciplined and demanding
No one expects Abigail Johnson to be her father’s Mini-Me, but there are many ways in which she takes after him, according to people who know and work with both.
Johnson grew up watching her father break away from family dinners to take customer phone calls. Like him, she is known to be disciplined and demanding, with a firm grasp of the company’s many business lines. And in an industry overrun by executives who flaunt their wealth, she does not play the role of spoiled billionaire.
Ask Johnson’s colleagues about her and they often mention first that she’s “down to earth,” as if discovering that came as a surprise. Some cite evidence of her normalcy — she likes to escape her security detail and delights in walking down Boylston Street unrecognized. She would sooner hustle to a meeting after an all-night flight than upend her colleagues’ schedules.
“Not that they don’t call you when they need something,’’ Wilens joked of the Johnsons. “But they’re very apologetic if they call you off-hours.”
Former classmates from Johnson’s Harvard Business School class of 1988 recall her as bright, articulate, and not keen on drawing attention to herself. That might sound like a generic description if it was not being applied to such an ultra-rich kid.
“There were a number of people in our class who came from wealth and had fathers who were successful businessmen, and they typically let everyone know it. Abby was not one of those,’’ said William LaPoint, a private equity executive in Boston who teaches at Babson College.
Johnson declined to be interviewed for this story, in keeping with her family’s borderline obsession with avoiding publicity. But she’s hardly a Howard Hughes-style recluse.
Johnson and her husband, Christopher J. McKown, have two daughters, one in college and the other in high school. They throw Christmas parties at their Milton home, a seven-bedroom Colonial built in 1905, tucked into the woods near the Blue Hills Reservation. Valued at $1.9 million according to real estate websites, it might fetch less than one of Tom’s and Gisele’s garages. The property, formerly owned by her grandfather, covers 5.6 acres and includes a tennis court.
The family has a summer place, too — a Nantucket house not far from Secretary of State John F. Kerry’s, near the Brant Point Lighthouse.
Early to work, always active
Johnson, whose voice betrays no trace of her 84-year-old father’s Kennedy-esque Boston accent, is an early riser who routinely heads to work by 6 a.m. She grew up in an active family that often took to the ski slopes. She works out at the Boston Racquet Club, a downtown gym that draws squash enthusiasts such as governors Deval Patrick and William F. Weld.
She spent her formative school years in Cambridge, attending the Shady Hill School and then Buckingham Browne & Nichols. She went to Hobart and William Smith Colleges, a small liberal arts school in upstate New York where she studied art history, perhaps inspired by her parents’ ambitious art collecting and support for museums. She graduated in 1984, landing a job at Booz Allen Hamilton in New York, at a time when management consulting was hot.
It was at Booz Allen that she met McKown, now a health care entrepreneur. He was a principal with a Harvard MBA. That would be her next stop, earning her master’s degree from Harvard in June 1988, the same month she and McKown married.
McKown, who grew up on a dairy farm in New York, has been successful in his own right. He cofounded a health care management company, Health Dialog Services Corp., in 1997 and a decade later sold it to a UK insurer for $775 million.
He is now chairman of Iora Health, a Cambridge company looking to improve the way primary care is delivered through technology and health coaching.
McKown, a runner with a dry sense of humor, serves on several nonprofit boards that offer a window into some of his and Johnson’s philanthropic interests outside the arts world, where her parents are major players. They include the Pine Street Inn homeless shelter, the Boys & Girls Clubs of Boston, and WGBH, the public radio and television broadcaster.
“As the financial crisis hit, he really helped us think about how are we going to get through this,” said Lyndia Downie, Pine Street’s executive director. That involved mapping out a three-year plan to raise funds among private philanthropists, as well as getting technical help from a large donor.
Johnson, McKown, and their daughters have for years managed to quietly volunteer to serve dinner at Pine Street, Downie said. “It’s not a big deal to them. They just see it as part and parcel of what they do,’’ she said.
Johnson makes occasional appearances at fund-raising galas, including at the Museum of Fine Arts, where her mother, Elizabeth B. “Lillie” Johnson, is a trustee and Abby is an overseer.
No doubt, charitable leaders are watching her more closely now that she has succeeded her father at Fidelity. The family controls one of the city’s largest philanthropic fortunes but unlike other big-givers doesn’t put its name on building wings. Abby and her brother, Edward Johnson 4th, serve on the Fidelity Foundation board. They also serve, along with their sister Elizabeth, on the $334 million Edward C. Johnson fund.
Pressure to innovate
On the business side, Fidelity executives have been getting a feel for Johnson’s management style since she was named president in 2012.
Kathleen Murphy, one of eight people who report directly to Johnson, runs the firm’s personal investing business and works a few doors down the hall from her boss, who hired Murphy from the investment firm ING Group in 2009.
“The most important reason that I came to Fidelity, and that I see in Abby every day, is this passion to do right by our customers,’’ Murphy said. “I think it’s the primary reason that Fidelity has been so successful for so long.”
But just as Johnson’s father warned her, success can be fleeting. While the firm remains the largest provider of 401(k) plans and IRAs, part of its strategy — using hot mutual funds to attract customers — has been eroded by the popularity of cheaper, vanilla index funds that don’t require genius managers. That puts pressure on Johnson to innovate.
She is tackling the challenge on many fronts, including by focusing on millennials and female investors and pressing for new technology to help investors interact with Fidelity.
While working to protect core mutual fund, brokerage, and retirement businesses, the firm on her watch also has become a major manager of charitable accounts for investors, and it’s goading Wall Street into make more IPO shares available to Fidelity customers.
She also has reached out to financial advisers who use the firm’s products. According to Robert Glovsky at The Colony Group in Boston, she appears at least annually at adviser conferences, often staying for one-on-one conversations.
“I find her to be very genuine, very engaging,’’ Glovsky said.
There is hardly a corner of Fidelity’s empire that’s foreign to Johnson. Her first position at the company was taking customer service calls during a summer of high school and another in college.
She worked as a summer intern in equity research during her time at Hobart and William Smith and at Harvard Business School. Upon joining the company full time in 1988, she dove into managing a succession of mutual funds over nine years, from the Industrial Equipment Portfolio to the diversified Trend Fund.
Abigail Johnson, shown in a photo from 1995.
The Boston Globe
Fidelity fund manager Abigail Johnson in 1995.
She moved on to a series of executive positions, overseeing the mutual fund operation, retirement plans, and other areas. If there is a rap on Johnson’s style, it’s that she is more wary of taking chances than her father.
Give her time, Wilens said.
“Her father occupied the big thoughts-innovative corner. So she took the more operational perspective,” he said. “As her father retreated, she moved into the whole innovation space and how to keep this company vibrant for the next generation.”
Johnson is a member of the board at the Massachusetts Institute of Technology, where she chairs the visiting committee of its Sloan School of Management, a group that meets every two years to make recommendations.
MIT president L. Rafael Reif said Johnson offered “high-level guidance on the financial situation we all had to face here” after the 2008 financial crisis. She has been a proponent of online course offerings and has helped shape changes at the business school, he said.
She travels frequently to Washington, D.C., to meet with policy makers on Fidelity’s business interests, including the recent regulatory changes for money market funds. And she’s the first and only woman to serve on the board of the Financial Services Forum, a lobbying group made up of the 18 most prominent chief executives in US finance.
She has mingled with other bigwigs at lunches at Boston College’s Chief Executives’ Club of Boston, but her most public appearance came in 2012, when Johnson paid tribute to her father during a Greater Boston Chamber of Commerce event honoring her family.
That evening, she actually stood in the spotlight. But you won’t see her posing for a photo shoot any time soon.
“The whole family’s like that,’’ Wilens said. “If you looked up ‘New England modesty’ in the dictionary, their pictures would be there.”
Beth Healy can be reached at firstname.lastname@example.org. Follow her on Twitter @HealyBeth.