Jaimie Dimon replacement within five years-hopefully

Jaimie Dimon has said he will find a replacement for himself within five years. It appears he's bound to JP Morgan until 2026 through a compensation scheme, so it looks as though the appointment won't happen within the next two years.

Dimon has been CEO for 20 years and he's currently Chairman and CEO. If somebody can't find a successor in twenty years' time, we have a problem. JP Morgan has done well under Dimon, no question. But that isn't a good enough reason for somebody to continue beyond a certain length of time. We don't know what issues have NOT been addressed during a CEO's tenure. That we get to know only after a CEO has left- and, very often, problems that didn't come to light during the CEO's time surface after he has left. GE's Jack Welch was a legend during his tenure. With the passage of time, his reign looks far less attractive than it was made out to be in his time. 

It's hard to say what's an optimal tenure for a CEO. However, in the highly competititve environment of the US, it's fair to say that ten years is long enough. Dimon has lasted twice as long. That doesn't reflect well on him- and much less on the board. Dimon is 68. So the distance between him and the next set of leaders would be at least half a generation. A whole generation would separate him from the rung below. That's not healthy in an organisation. It is incumbent on the board of directors to plan for orderly succession at appropriate intervals. 

There was a parallel to the Dimon situation in India. HDFC Bank had Aditya Puri as CEO for a quarter of a century. When Puri left at 70, it was reluctantly- the regulator would not entertain the idea of any increase in the age limit for CEOs beyond 70. 

There is a term limit for the US president- two terms of four years and no more. In recent years, several presidents- Clinton, Bush, Obama- left office when they were still in their fifties or so and full of beans. The underlying principle is simple enough: institutions need a change at the top at reasonable intervals. If that is true for the United States, the mightiest empire the world has known, it is certainly true for corporations.