Honig International in the News

July 19, 2005
JP Morgan Vice Chairman David Coulter To Leave
By David Enrich

NEW YORK -(Dow Jones)- David A. Coulter, JP Morgan Chase & Co.'s (JPM) vice chairman who had stints at the helm of its investment and consumer banking divisions, is leaving the company to pursue "new opportunities."

The 57-year-old Coulter, who has played a prominent role in the banking industry's consolidation over the past decade, currently oversees JP Morgan's West Coast operations and the company's two private-equity funds.

He doesn't have a new job lined up, but is in the early stages of looking for a position elsewhere in the financial-services industry, according to a person familiar with the matter.

Coulter was trout-fishing in Montana on Tuesday when JP Morgan announced his retirement. "After five great years at this company, I've decided it's time for me to go on to something else," Coulter said in a press released issued by the bank. "I'm proud of what I helped build and look forward to new opportunities ahead."

Coulter is the second senior executive at a major bank to decide to step down in recent days. Last week, Citigroup Inc. (C) President Robert Willumstad announced that he's leaving in the hopes of finding a job as CEO at another financial-services company.

Two years ago, Willumstad was passed over by Citi's then-CEO, Sanford Weill, for the top job, which instead went to Charles Prince.

Coulter's retirement, which is effective immediately, comes after he was stripped last year of his New York-based job as head of the investment bank. Instead, he was sent to Los Angeles to run JP Morgan's West Coast business. While Coulter retained the title of vice chairman, the shift was widely regarded as a demotion at the hands of JP Morgan's president and soon-to-be-chief executive, Jamie Dimon.

Coulter's job in California is a "somewhat honorary position" that largely entails meeting with clients, not operating a business, said Ray Soifer, a banking industry consultant. His exit "is part of the Jamie Dimonization of JP Morgan Chase."

Coulter decided to depart at least partially as a result of the gradual transfer of power to Dimon, who is slated next year to take over as J.P. Morgan's CEO, a position currently held by William Harrison, according to the person familiar with the matter. "Any time there's a change at the top, it's amazing how it ripples through an organization," the person said.

Coulter's job duties were about to shrink further. One of the two private- equity funds that he oversaw, JPMorgan Partners, is going to be spun off from the company sometime in the next year. With Coulter gone, the heads of both private-equity funds will report to Harrison and Dimon.

This wouldn't be the first time Coulter has left a company amid questions about his authority being diminished.

In 1998, as CEO of San Francisco-based BankAmerica Corp., Coulter helped orchestrate a blockbuster $67 billion merger with NationsBank Corp., which spawned Bank of America Corp. (BAC). The combined company was headquartered in Charlotte, N.C., and run by NationsBank CEO Hugh McColl. Coulter and McColl clashed, and Coulter stepped down shortly after the merger closed.

After leaving Bank of America, Coulter, who had climbed through the ranks of BankAmerica's investment-banking business, joined mergers-and-acquisition boutique Beacon Group. After JP Morgan's predecessor Chase Manhattan Corp. acquired Beacon five years ago, Coulter stayed on as head of Chase's retail- banking business. In 2002, he switched to the investment-banking side.

Coulter is said to be specifically interested in jobs in the banking or insurance industries, although he's interested in taking on a role as a principle in a business. That raises the possibility of him joining - or starting his own - private-equity or hedge funds.

With few vacancies for top spots in the financial-services industry, Coulter and Willumstad could find themselves going after the same jobs.

"The fact that both of these folks are available certainly creates some competition. The pyramid is very thin at the top," said Barry Honig, president of Honig International, an executive-search and management-consulting firm. But, he added, "I would seriously doubt that either of them will have any trouble finding a job."

Coulter won't be short on funds if he doesn't quickly land a new job. He snagged a lucrative severance package when he left Bank of America, and last year he pocketed $11 million in compensation, making him one of JP Morgan's three highest-paid executives.

"This is a man who doesn't need a job," Soifer said.

-By David Enrich, Dow Jones Newswires