Fidelity’s Abby Johnson secures another key role in the company

BOSTON ― In a sign of shifting power inside Fidelity Investments, Chairman Edward C. Johnson III has relinquished a central role, giving his daughter Abigail Johnson the title of chairman of the company’s flagship mutual fund business.

Abigail Johnson in late February became chairman of Fidelity Management & Research Company, which manages about $700 billion in discretionary client assets, according to disclosures made with the U.S. Securities and Exchange Commission.

That change, until now, slipped by unnoticed in individual mutual fund prospectuses that have trickled out over the course of a number of months. But analysts see the title change as yet another sign that Abigail Johnson is a leading candidate to run a family-held company with $1.54 trillion in total managed assets.

“Incrementally, they continue to position her to run the whole of it because the whole of it will eventually belong to her,” said John Bonnanzio, who edits a newsletter for Fidelity investors.

Edward “Ned” Johnson is 81 and has been running the parent company, FMR LLC, since 1977. But in January, he relinquished his role as trustee and chairman of a board that oversees stock and income mutual funds. His longtime top lieutenant, FMR Vice Chairman James Curvey, stepped in as acting chairman. Curvey is 76.

Then about a month later, Abigail Johnson, 49, added the Fidelity Management & Research chairman’s title, according to disclosures to the SEC. Fidelity spokeswoman Anne Crowley downplayed the change, describing it as a “corporate formality.”

“Abby has for many years served as director of FMR LLC, the parent company, and also as vice chairman of the board of directors for the entire firm,” Crowley said in an email message. “These are much higher profile roles at the parent company” than the new role at Fidelity Management & Research.

Last year, though, Fidelity fanned the flames of succession talk when it named Abigail Johnson and Ronald O’Hanley to top executive roles that essentially split the duties for running the company. Analysts said the move made sense because of Fidelity’s size and Edward Johnson’s age.

“Clearly, (Edward Johnson) is stepping away from Fidelity duties,” Bonnanzio said. “He has to … It’s a big company with big responsibilities. I don’t know too many people in their 80s who can do all of that.”

Indeed, several former Fidelity senior executives who have left the company in recent years say that Edward Johnson’s duties are more part time than anything else. Of course, Fidelity has maintained, as recently as May, that the octogenarian is “active and fully engaged in running the company and has no plans to retire,” according to a company statement issued then.

Nevertheless, Fidelity last year plucked O’Hanley from the senior management ranks of Bank of New York Mellon to play a major role inside the company. He is Fidelity’s president of asset management and corporate services while Abigail Johnson runs Personal, Workplace and Institutional Services, Fidelity’s largest business organization.

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