Questions of succession at Fidelity

Boston isn't especially rich when it comes to matters of corporate intrigue, now that most of the city's biggest companies have been turned into field offices and subsidiaries. But there's no doubt what question still prompts impassioned downtown debate: Who will run Fidelity Investments?

Chairman Edward C. ``Ned" Johnson III is 76 years old. His daughter, Abigail, is a large shareholder of the world's largest mutual fund company, but it remains an open question whether she will succeed her father to become the third generation of Johnsons leading the privately held financial giant.

Now Bob Reynolds , the company's chief operating officer and legitimate dark-horse succession candidate, has complicated the picture further by becoming a finalist in the competition to select a new commissioner for the National Football League. He is among five remaining candidates for one of the best jobs in professional sports.

``Everyone at Fidelity understands there's going to be a major transition sooner rather than later," says Jim Lowell , publisher of the Fidelity Investor newsletter. ``It sounds to me that he's laying the groundwork for his own exit strategy. There's something in Fidelity's current playbook that has led Bob Reynolds to say he's willing to switch teams."

Reynolds, 54, has been an important figure at Fidelity for a long time and surely will be for years to come -- if he continues to work there. A marketing leader who helped build the fund company's critical retirement savings investment business through the 1990s, Reynolds is among the all-time most powerful Fidelity executives not named Johnson and still in his professional prime.

Fidelity's internal machinations are always fascinating but hopelessly opaque to outsiders. The few people who really know don't say, and certainly don't write about it. But the possibility of Reynolds quitting to lead the NFL raises a number of good questions.

For one, did Reynolds learn something about the future that made a career change seem appealing? Could he just be another executive who has already made a fortune and becomes intrigued by a late career change? Who would fill his shoes in the near term, performing the duties of a day-to-day operating chief? And what, if anything, does it say about the direction of Fidelity after Ned Johnson?

``Ned is older and at some point something has to happen," says mutual fund industry consultant Geoff Bobroff. ``Is Reynolds part of that, or is there some other event that will change the dynamic? I think clearly this does cast somewhat of a shadow on what the future may be for Fidelity and its leadership."

Reynolds, who also is a vice chairman at Fidelity, has worked for the company for 22 years. Among his connections to football: He worked as a college referee on weekends for 15 years.

Reynolds was not available for a phone call yesterday, but Fidelity offered his written statement on the NFL job. ``Should the league decide to offer me the job, I would have to consider it," the statement said. ``But at this time, I have not been offered the job, nor made any decision to leave Fidelity."

Fidelity officials declined to discuss the possibility of a Reynolds departure. ``It's premature to speculate at this time," said spokesman Vin Lopochio. ``But Fidelity has a strong team of cross-trained executives and has succession plans for all key positions in the company."

There have been other senior executives who worked their way close to the top of Fidelity only to hit the glass ceiling of a family business. (Johnsons own just under 50 percent of Fidelity today but exercise effective control of the money-management empire.)

Decades ago, John O'Brien rose close to the top and moved on to run other companies, including Allmerica Financial Corp. More recently, Robert Pozen left after a career in senior Fidelity jobs and currently serves as the chairman of MFS Investment Management in Boston.

But Reynolds is in a different situation. Ned Johnson is much closer to retirement age than he was when other executives ran into limits to their advancement. No one was going to dislodge the elder Johnson years ago, but that won't be an issue in the coming generational shift.

Abigail Johnson, 44, is considered a likely heir apparent, but no sure thing. Fidelity's money-management arm turned in mediocre performance under her recent leadership. Reynolds was presumed to be a big part of the future, no matter how succession played out. One exception, once considered unthinkable but now seen as a remote possibility: the sale of Fidelity itself.

A Reynolds resignation would also punch a big hole in Fidelity's management ranks and some insider would probably assume more of his responsibilities. Bobroff points to Stephen Jonas , executive director of Fidelity Management & Research, as a likely candidate to move up. Lowell favors Ellyn McColgan , president of Fidelity Brokerage Group.

It certainly sounds like Reynolds wants to become the NFL's commissioner, and he may have an ideal background for the glamorous job. He will be required to deal with many petulant, highly talented performers who get rich or get fired based on results. He'll ultimately report to owners who are unfathomably wealthy. Any of that ring a bell?

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.