It was long expected, yet noteworthy: Abigail Johnson became the unquestioned boss at Fidelity Investments in December, when her father, Edward C. “Ned” Johnson 3d, stepped down as chairman after 39 years at the helm.
The younger Johnson, 55, has been chief executive of Boston-based Fidelity since 2014 and was groomed for the top job for decades. It’s easy to forget she is one of the most powerful women in America, as well as one of the wealthiest. Like her famous father, she keeps a very low profile, despite running a company of 45,000 employees.
She is now calling all the shots at the $2.2 trillion money manager, which oversees a large chunk of US workers’ retirement savings. Johnson shoulders this responsibility at a challenging time. Fidelity rose to prominence on actively managed mutual funds, such as Magellan and Contrafund, which try to outperform an index like the Standard & Poor’s 500 on the stock-picking savvy of their managers and research analysts. In recent years, more investors have directed some or all of their money to low-cost index funds, which match or track (rather than trying to beat) an index. Active funds like Fidelity’s have been out of favor industrywide since the financial crisis.
Johnson reported a $3.5 billion operating profit for the company for 2016 and is taking a series of measures this year to boost performance. Fidelity offered its first-ever buyout plan to try to entice up to 3,000 employees older than 55 to retire. It also slashed online brokerage fees to entice customers, prompting a price war with Charles Schwab Corp. and other rivals.