Steve Black and the Intrigue at JPMorgan

Wall Street executives like calling boardroom intrigue Shakespearean, but it isn’t. Motives are knotty in Shakespeare’s tragedies; psyches are scrambled, and even ravenousness gets convoluted. Banking is purer. There is allegiance, betrayal, revenge, failure, power and money.

So while it might have seemed that something intricate and theatrical must have happened last week, when JPMorgan’s Steve Black announced his departure only a few months into his three-year vice chairmanship, the story seems to be relatively straightforward. There were problems with ambition and age: The 58-year-old Mr. Black knew that he wasn’t in line to replace the 54-year-old chief executive Jamie Dimon, and didn’t relish a vice chairmanship where he could get a few deals done but wasn’t in charge of anything in particular. “This wasn’t something he wanted or needed to do forever,” a source at the bank said. “He wants to run something.”

But even if there were no poisonous soliloquies or stabbed backs, the history of Mr. Black, a longtime member of Mr. Dimon’s inner circle, provides a rare peek into Wall Street’s family dynamics.

Mr. Black ran JPMorgan’s gargantuan investment bank with Bill Winters until late last year, when they were both replaced by Jes Staley, now widely considered the executive who’ll succeed Mr. Dimon if something happens to him in the next few years. Mr. Dimon and Mr. Staley are both in their 50s, not much younger than Mr. Black, but the small difference matters. Besides, the executives who could succeed Mr. Dimon if he leaves at retirement age, like treasury and securities services head Michael Cavanagh, asset management head Mary Erdoes and retail chief Charlie Scharf, are in their 40s. (Mr. Winters is younger, too, but his relationship with Mr. Dimon wasn’t as good; he’s left the bank.)

Mentorship and succession get even trickier when personal history is involved. In 1982, red-cheeked Jamie Dimon didn’t go into investment banking like the rest of his Harvard Business School class. Instead, family friend Sandy Weill, who’d sold his firm Shearson to American Express for nearly a billion dollars, hired him as his personal assistant there.

Only three years later, the genteel American Express chief James D. Robinson III essentially pushed out Mr. Weill; Mr. Dimon went with him. “When we get down the road,” he’s said to have told Mr. Weill, “just give me a little more of any deal.”

In 1986, they took over a shoddy loan operation called Commercial Credit, toiled away together in an office in Baltimore and merged the firm with Primerica in 1988, a year after it had bought up Smith Barney. Mr. Weill made his deputy the firm’s president in 1991. “I almost fell off my chair,” Mr. Dimon told The Times that day. He was 35.

Mr. Black, who’d started in the Smith Barney trainee program in 1974, stayed as the firm ballooned. In 1993, he was promoted from the head of Smith Barney’s capital markets division to vice chairman. A year later, Mr. Black officially became Mr. Dimon’s deputy.

As the capital markets chief, Mr. Black had to deal with the clean-up when Mr. Weill bought back Shearson, his old firm, and merged it with Smith Barney. But Mr. Dimon got the credit in the press for making necessary cuts. “We had a pretty good yak around here about that,” Mr. Dimon chuckled to a reporter in February 1998.

A few months after that interview, things got bad. In the wake of Citicorp’s merger with Travelers, then the biggest in corporate history, he and Mr. Black openly feuded with Deryck Maughan, the Englishman at the helm of Travelers’ Salomon Brothers. (He became Sir Maughan in 2002.)

Their quarrel came to a head at a black-tie Saturday night ball during a post-merger retreat in a West Virginia luxury resort. According to narratives in books by Duff McDonald and Andrew Ross Sorkin, among others, Mr. Black announced to his wife that he was going to extend an olive branch by asking Va Maughan, the Englishman’s wife, to dance. He courteously cut in, but Mr. Maughan decided to not reciprocate. Ms. Black stood alone on the dance floor, and she started to cry. “You fucking asshole,” Mr. Black told him. “If you ever do something like that to my wife again, I will drop you where you stand.” Mr. Maughan, who is tall, walked away. Mr. Dimon demanded an explanation. Mr. Maughan did not feel like providing one. Mr. Dimon turned him around, loosening a button from his tuxedo. “You,” said Mr. Maughan, “popped my button.” That night, at 3 a.m., Mr. Weill decided to let Mr. Dimon, who’d been by his side since graduate school, go.

Mr. Black followed him out. Afterward, Mr. Black spent a year with his family on safari in Africa and driving race cars in Europe. In 2000, Chase chief William B. Harrison Jr. hired him.

In the meantime, Mr. Dimon built up Bank One, which, in 2004, merged with JPMorgan in a $58 billion deal. Mr. Dimon became CEO by 2006.

In a rare interview, Mr. Black denied to BusinessWeek that Mr. Dimon was a yeller. “Throughout our working relationship,” read Mr. Dimon’s farewell memo to Mr. Black, posted to the Web site Dealbreaker, “he has always impressed me with his tremendous dedication to the firm.”

Mr. Black gave a brief interview to The Journal, where he said he’s considering jobs in hedge funds or private equity, and to Mr. McDonald, at Fortune. “When the outside world puts an individual like him on a pedestal,” he said about Mr. Dimon, “and thinks that he’s the only person at the company who has any ability, sure, it can be a little frustrating. But that’s not the way Jamie acts. It’s not Jamie’s fault.” Steve Black and the Intrigue at JPMorgan