*Lawson's second Fidelity stint ends quickly
*Lawson shook up executive ranks
By Aaron Pressman
BOSTON, January 20 Rodger Lawson, the outgoing
president of Fidelity Investments, did not last long in his
second stint at the mutual fund giant.
Lawson, 63, was hand-picked by Fidelity chairman Edward C.
"Ned" Johnson III as his right-hand man, and took up the reins
in August, 2007. But less than two-and-one-half years on the
job, and with Johnson about to turn 80 years old in June,
Lawson announced on Wednesday he was stepping down.
British-born, outgoing and known to favor pin-striped suits
and cufflinks, Lawson provided a stark contrast with chairman
Johnson, a reticent Boston Brahmin, who was photographed with
badly worn shoe soles. Johnson inherited the top from his
father in 1972.
"I picked my moment well. This has been a tough
two-and-a-half years," Lawson said in an interview.
As Johnson's number two, Lawson moved quickly to put his
stamp on Fidelity, which was suffering from poor fund
performance and sales. Less than two months on the job, he
oversaw one of the largest reorganizations in the company's
He also revamped executive pay and pushed out much of the
"old guard" that had run units under his predecessor, Robert
Reynolds. Departures included Ellyn McColgan, former head of
Fidelity's brokerage and sales operations, who had been
mentioned as a possible successor to run the entire firm.
The new team was "more attuned around competitiveness,"
Still, the performance of Fidelity's funds was uneven
during his tenure. Equity fund performance beat 72 percent of
rivals in 2007, just 36 percent in 2008 and improving to 66
percent in 2009, for example.
Lawson also emphasized cost-cutting and oversaw several
rounds of layoffs during a tumultuous period for the financial
services industry when most of Wall Street also slashed jobs.
Noting that expenses had risen more quickly than revenues
for several years before he arrived, Lawson asked rhetorically:
"Can you imagine what it would have been like if that had
Total headcount at Fidelity dropped to 38,100 as of June
30, 2009 from 46,800 at the end of 2007.
Financially the strategy seemed to work, helping Fidelity
survive the economic shocks that began in 2008 in relatively
better shape than its peers. In a filing for a private
placement in the fall of 2009, Fidelity disclosed its net
income fell 7 percent to $1.4 billion in the first nine months
of that year.
Among Fidelity's largest competitors, BlackRock Inc.
(BLK.N) saw its operating income drop 29 percent to $889
million for the first nine months of the year.
But Lawson also oversaw a period of instability at
Fidelity, an issue for employees and clients as its controlling
Johnson family prepares for the inevitable transition.
A number of Lawson's key appointments left after just short
stints including Marvin Adams, who ran its technology and real
estate operations, and Larry Renfro, once in charge of new
Lawson and several top lieutenants also kept their New York
area residences, raising doubts among some employees about
their commitment to the Boston-based firm.
Lawson's second tour of duty came 16 years after he left
Fidelity to join Bankers Trust and, later, Prudential Financial
(PRU.N), where he rose to the rank of vice chairman before
resigning in May, 2007.
(Reporting by Aaron Pressman, Ross Kerber and Svea Herbst,
editing by Leslie Gevirtz)