Breaking News from CNBC's Kayla Tausche: Talks Dissolve Between Legg Mason & JPM's Staley Over CEO Role
WHEN: Today, Thursday, December 6, 2012
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of breaking news from CNBC's Kayla Tausche. Following is a link to Kayla's story on CNBC.com: http://www.cnbc.com/id/100284111.
All references must be sourced to CNBC.
BECKY QUICK: THE EXECUTIVE SHUFFLE CONTINUES AT JPMORGAN. THE BANK NAMING TWO CHIEF CONTROL OFFICERS TO OVERSEE RISK AND PROCEDURES LIKE ANTI-MONEY LAUNDERING, BUT THERE IS ONE SENIOR EXECUTIVE AT THE BANK WHO COULD JUMP SHIP. CNBC'S KAYLA TAUSCHE JOINS US NOW WITH SOME BREAKING NEWS. KAYLA.
KAYLA TAUSCHE: HEY GOOD MORNING, BECKY. RIGHT NOW THE PERSON TO WATCH – EVERYONE WHO IS WATCHING JPMORGAN IS LOOKING AT JES STALEY. HE IS FORMERLY CEO OF ASSET MANAGEMENT, THEN HE WAS THE CEO OF THE INVESTMENT BANK WHERE HE NOW STANDS AS CHAIRMAN AS OF JULY. THAT IS LARGELY VIEWED AS A SWAN SONG TYPE OF ROLE THAT RIVALS HAVE DEFINITELY TAKEN NOTICE OF. SOURCES TELL ME THAT STALEY WAS RECENTLY IN PRELIMINARY DISCUSSIONS OVER THE CEO ROLE AT LEGG MASON, THE BALTIMORE ASSET MANAGER. THOSE TALKS FELL APART IN THE LAST MONTH AND STALEY WAS TOWARD THE TOP OF THE SHORT LIST FOR THE BOARD AND ITS RECRUITERS, AFTER BEING IN SERIOUS TALKS FOR THE JOB EVEN BEFORE THE FINANCIAL CRISIS. NOW I'M TOLD THAT THOSE PREVIOUS TALKS WERE PART OF THE CONTRIBUTION TO STALEY'S BEING PROMOTED TO CEO OF THE INVESTMENT BANK AND INTO A SLOT WHERE HE WAS EXPECTED TO SUCCEED JPMORGAN CEO JAMIE DIMON. DIMON INSTEAD REPLACING STALEY WITH TWO YOUNGER COLLEAGUES THIS SUMMER AND RIGHT NOW, THIS IS IMPORTANT BECAUSE THERE ARE TWO SITUATIONS AT PLAY HERE. THE FIRST IS THE FACT THAT JES STALEY – WELL RESPECTED ON THE STREET, WELL LIKED WITHIN JPMORGAN – IS LARGELY VIEWED AS A FREE AGENT RIGHT NOW. HE WAS A FINALIST FOR THE CEO JOB AT BARCLAY'S EARLIER THIS YEAR. BARCLAY'S BOARD EVENTUALLY WENT WITH AN INSIDER FEARING AN EXODUS OF MANAGERS WITHIN THE BANK AND ALSO FEARING THE WRATH OF REGULATORS, SHOULD AN AMERICAN AGAIN RUN THAT BRITISH BANK. NOW THE SECOND ISSUE – FIRST OF ALL WE SHOULD NOTE THAT PREVIOUSLY STALEY HAD SAID IN INTERVIEWS THAT IF HE WEREN'T THE SUCCESSOR TO DIMON, HE WOULD TAKE AN OFFICE AT HIGHBRIDGE. HE WOULD MAYBE WORK AT ONE OF THE BANK'S INTERNAL ARMS, BUT PEOPLE CLOSE TO HIM SAY THAT HE NOW HAS HIS SIGHTS SET ON BEING CEO OF A PUBLICLY TRADED COMPANY AND WITH HIS RECORD, A LOT OF PEOPLE THINK THAT HE COULD DEFINITELY DO THAT. BUT THE SECOND ISSUE THAT WE WILL GET TO IS WHO WILL ACTUALLY LEAD LEGG MASON. IT USED TO HAVE A TRILLION DOLLARS UNDER MANAGEMENT, USED TO BE CLOSE TO A TEN BILLION DOLLAR MARKET CAP, BUT NOW AUM IS DOWN BY 40 PERCENT. CEO MARK FETTING, WHO TOOK THE REIGNS IN JANUARY OF '08, STEPS DOWN IN OCTOBER FOR THAT REASON AND THE FIRM HIRED KORN/FERRY AS A RECRUITER, BUT THEY'VE ALSO GOT AN AGGREGATING FACTOR WHICH IS NELSON PELTZ. HE HAS A TEN PERCENT STAKE SINCE 2009, HE IS ALSO ON THE BOARD. PELTZ HAD AN AGREEMENT THAT KEPT HIM FROM BUYING MORE SHARES AND KEPT HIM FROM AGITATING FOR CHANGE, BUT THAT DEAL ACTUALLY EXPIRED LAST MONTH. THE SPOKESPERSON TOLD ME THAT THEY HOPE TO WRAP UP THAT CEO SEARCH EXPEDITIOUSLY, BUT WATCH THAT STOCK BECAUSE WE COULD SEE SOME CHANGE IF THEY DON'T FIND A CEO BY THE END OF THE YEAR.
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