BOSTON - At age 77, Edward "Ned" Johnson III can't keep this paceup forever. But it sometimes seems the Fidelity Investments chiefhopes to.
Johnson's tenure running the nation's largest mutual fund companyhas spanned three decades - the only other change of leadership in61 years at Fidelity was when Johnson took over for his father. Butthe job has become increasingly complex as Johnson tries to fend offrivals' gains and streamline operations, while outsiders' calls forgovernance reform grow louder.
"He hasn't missed a beat, and a lot of people have crumbled whilehe's still going 100 miles per hour," says Eric Kobren, a formerFidelity employee who edits the independent money advice newsletterFidelity Investor. He suspects Johnson "isn't going anywhere soon."
The notoriously insular company isn't publicly offering atimeline for leadership change, or disclosing details of asuccession plan it says it has in place, even amid some suggestionsthat the uncertainty could be hurting Fidelity's competitiveness.
The heir apparent - Johnson's 46-year-old daughter, AbigailJohnson - has not been confirmed as such, and some observersquestion whether she even wants the job. And a flurry of managementand organizational changes this year eliminated two other successorcandidates from contention.
Outsiders still regard Abigail Johnson as an odds-on favorite forthe top job, by virtue not only of her bloodline, but the diversityof management positions she's held overseeing Fidelity'sincreasingly far-flung financial services.
But her father is still firmly in charge - and by all accounts,apparently healthy.
"Nothing has told me that he's anxious to pass the baton veryquickly, unless something were to develop with his health, or somefamily issue," said Patrick McGovern, a friend who occasionallydines with Johnson and is founder and chairman of IDG Group, aBoston-based technology research and publishing firm.
Fidelity rarely makes executives available for interviews, anddeclined requests from The Associated Press. A recent statementissued by Ned Johnson on succession planning described a continuingprocess to "pass the corporation on in good operating order to thenext generation of executives at the appropriate time."
Whoever eventually succeeds Johnson, big changes are expected atthe Boston-based company that's a huge force on Wall Street, as thelargest provider of Americans' workplace retirement savings plansand a manager of nearly $1.6 trillion in assets.
Observers say Johnson's successor won't have as much power as hehas wielded filling the chairman and chief executive roles since1977 - posts that could be split between two people when hisreplacement is named. And the private firm will face increasingpressure to operate more like a publicly held company, with greaterattention to open governance, cost-cutting and short-term financialresults.
"Whoever follows Ned Johnson can't run it the way he has. The oldmodel doesn't work anymore," said Bruce Raynor, co-chairman of theCouncil of Institutional Investors, representing public, labor, andcorporate pension funds, and general president of Unite Here, aunion of hospitality and textile workers.
Fidelity has recently diversified from its core mutual fundbusiness into areas such as individual retirement planning andemployee benefit management, after seeing only middling returns inrecent years from key mutual funds that fueled rapid growth in thelate 1980s and early '90s.
Today, 46,400 Fidelity employees provide financial services to 23million individuals.
Meanwhile, Vanguard Group and Capital Group's American Funds haveenjoyed greater success attracting investor money amid risingpopularity of low-cost index and exchange-traded funds. Thoseinvestments don't play off Fidelity's strength as an active managerof funds that capitalize on the hottest stocks from day to day.
At Fidelity, Johnson family members hold 49 percent of Fidelity'svoting stock - key managers control the rest - and the company'sboard consists solely of current or former company executives andJohnson family members.
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