New York - JPMorgan Chase & Company Chief Executive Officer Jamie Dimon said he has been diagnosed with throat cancer but that the ailment is curable and he plans to remain actively involved in the largest US bank's business.
In a memo to the bank's employees and shareholders on Tuesday, Dimon, 58, said the cancer was caught at an early stage and is confined to the original site and the adjacent lymph nodes on the right side of his neck.
He will undergo radiation and chemotherapy treatment that is expected to last about eight weeks. The company did not disclose the stage of the cancer.
“I feel very good now and will let all of you know if my health situation changes,” Dimon wrote. “Importantly, there is no evidence of cancer elsewhere in my body.”
The cancer was discovered after Dimon, who was not feeling well about two weeks ago, went to see doctors, a person familiar with the matter said. Dimon spent last week in intensive tests and visiting multiple doctors, the person said. Dimon was never a smoker.
The company has a short, medium and long-term succession plan in place, the source added.
The news of Dimon's ailment is an unexpected blow for JPMorgan. Dimon, who has been chief executive of the bank for the past eight years, was credited with steering the company successfully through the financial crisis.
In recent years, however, the bank has run into headwinds that have taken off some of its sheen. In 2012, the bank lost $6.2 billion from risky derivatives bets that came to be known as the “London Whale” trades. And late last year, it agreed to a $13 billion settlement with the US government to settle charges that it overstated the quality of mortgages it was selling to investors in the run-up to the financial crisis.
The bank's massive London Whale loss prompted shareholders last year to push Dimon to give up the chairman's role, which he also holds. But shareholders backed off when Dimon's allies suggested at the time he might leave the company if he lost one of the titles.
“One of the main reasons I'm a shareholder is Jamie Dimon, one of the biggest reasons by far,” said Michael Holland, founder of Holland & Co, an asset management firm overseeing more than $4 billion of assets, including JPMorgan shares. “He is by numbers and the record one of the best financial CEOs of our generation.”
JPMorgan's shares were down 0.6 percent in after-market trading.
Dimon began his career as a protégé of Sanford “Sandy” Weill after graduating from Harvard Business School in the 1980s. He helped Weill build what is now Citigroup, starting with Commercial Credit, a consumer finance company based in Baltimore, and turning it through a series of acquisitions into a financial supermarket, with businesses ranging from insurance to investment banking to commercial lending.
In 1998, Weill fired him, and he set out on his own, eventually ending up as chief executive of JPMorgan Chase & Company.
Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel, said investors probably “give a 5 percent premium to his leadership.”
But McCormick added, “I think it behooves him to ramp up the succession plans a little quicker than expected, even if his prognosis is great.”
It is not clear what impact, if any, Dimon's health would have on JPMorgan's board succession planning process.
Sources have previously said that the bank has several senior executives who could potentially succeed Dimon.
The most obvious successors from within the bank include Daniel Pinto, chief executive of corporate and investment bank, and Matthew Zames, JPMorgan's chief operating officer.
Other possible in-house successors include Gordon Smith, the CEO for the consumer bank, which accounts for about half of the company, and Mary Erdoes, chief executive of asset management.
Dimon was not in the office during the last half of the afternoon because he was seeing his doctor again. The company made the announcement after he called in from that visit to the doctor.
The CEO recently had confided in some top JPMorgan executives that he was going through tests and medical examinations, said an executive. Since then, “there's been a huge outpouring of support for him,” the executive said. People who knew about the illness have called and emailed to encourage him, the person said.
Dimon runs and plays tennis and looks fit to his colleagues in the bank's executive offices. He exercises several times a week. When on business trips, he usually starts his days in hotel gyms.
In his memo, Dimon said the treatment is still being finalised and would curtail his travel.
He cancelled previously scheduled plans to travel to Europe later on Tuesday, where he had been set to meet with the prime ministers of Greece and Italy and also visit Spain, England and Germany.
Dimon plans to seek treatment at New York's Memorial Sloan Kettering Hospital, which is widely considered one of the best cancer hospitals in the world.
According to the National Cancer Institute, the survival rate for mouth and throat cancers diagnosed at any stage is 63 percent after five years.
If the cancer is caught when it is still localised, meaning it is confined to the primary site, the five-year survival rate is 82.7 percent. That drops to 60.5 percent if the cancer has spread to the lymph nodes, and 37 percent if it has spread to distant sites in the body.
“These cancers are very treatable and have a good prognosis,” said Dr Robert Haddad, clinical director of the Head and Neck Cancer Treatment Centre at Dana-Farber/Brigham and Women's Cancer Centre in Boston.
Treatment, however, can be very debilitating. “The radiation therapy is a very tough treatment,” Haddad said. “It can leave the patient with mouth sores, and difficulty swallowing and speaking. Some patients are not able to eat at all during the treatment and require a feeding tube to get them through it.”
Because there is often residual damage from the radiation, Haddad said: “Even two or three months after the radiation is finished can be very tough for a patient.”
Other CEOs have led companies after being diagnosed with cancer. In 2012, for example, Berkshire Hathaway Chief Executive Warren Buffett said he had stage 1 prostate cancer that required a two-month treatment, consisting of daily radiation treatments.
In 2010, American International Group said CEO Robert Benmosche had cancer and an unclear prognosis. Benmosche led the insurer for the next four years, helping the company repay taxpayers for their crisis-era bailout. Benmosche will retire from AIG in September this year. - Reuters