For hundreds of years, the financial sector has been dominated by men. From Director of Finance to Junior Finance Officers, almost every finance-related role in a company has been performed by men. However, things have changed since then.
Since 2016, a new face has been making headlines as the most powerful individual in the world of finance. Her name is Abigail Johnson, and she is the face of Fidelity Investments. Heading a company with net assets worth $2.1 trillion, Ms. Johnson is redefining gender roles and taking on a male-dominated industry head-on. Here’s a look at Abigail Johnson’s success story.
Abigail Pierrepont Johnson was born on December 19, 1961 in Boston. She is the granddaughter of Edward C. Johnson II, who founded the Fidelity Management and Research (FMR) firm in 1946. The firm managed mutual funds, which involved a team of professional portfolio specialists managing money of various stock market investors.
During the stock market boom of the 1980s and 90s, Fidelity Investments emerged as one of the leading financial management companies in the United States. In 1977, Abigail’s father (Edward C. Johnson III) took over the company.
Abigail landed her first job at Fidelity Investments after she finished her high school in 1980. Johnson’s role in the company was to answer phone calls in the customer relationship department. Despite having a major in art history from Hobart and William Smith College, Abigail went on to pursue an MBA degree from Harvard Business School. She finished her degree in 1988.
Despite being in the family business, things weren’t always easy for Abigail. After graduating from Harvard Business School, Ms. Johnson worked as a lowly stock analyst at Fidelity Investments. She was initially assigned to the Select Industrial Equipment Fund division. The job wasn’t exciting at all.
However, Johnson was determined to make a difference. Within a few years, she was promoted to the position of a Portfolio Manager. She established herself as an able and reliable fund supervisor after achieving exceedingly positive results for Fidelity’s long list of clients.
By the year 1994, Abigail Johnson was serving as an Associate Director at Fidelity Investments. In 1995, Edward C. Johnson III divested a large share of his voting rights and handed them to the parent company FMR. Many experts predicted that this move was done as Mr. Johnson was confident in his daughter’s abilities to succeed him as the company’s chairman.
In 1998, Ms. Johnson was acting as a Senior Vice President at Fidelity Investments. By this time, she was married to Christopher J. McKown and a mother of two. McKown is the Co-Founder of Iora Health LLC, a healthcare information company.
Ascension to Presidency and Challenges
In May 2001, Fidelity announced that Ms. Johnson was going to succeed Robert C. Pozen as the President of Fidelity’s mutual funds division. Abigail’s promotion made her the third most powerful individual in her company, after her own father and the company’s CEO Robert L. Reynolds.
When Abigail took over the supreme position at Fidelity’s mutual fund division, the company was going through a turbulent phase due to a bear market. Under this type of market, the value of stocks was rapidly decreasing and showed no signs of improvement.
Fidelity was also facing tough competition from the Vanguard group, which was gaining a strong foothold in the financial sector due to its effective marketing campaigns. However, Fidelity was still a strong company, with a net worth of $1.4 trillion and a $900 billion American mutual fund portfolio. The organization also managed $100 billion funds from over 17 million overseas investors.
Experts noticed a contrast between Abigail Johnson’s management style and that of her fathers. Edward C. Johnson III believed in the Japanese principle of kaizen, which focused on small, incremental growth. Edward’s philosophy was different from the American management style of expansion through mergers and acquisitions.
Abigail took a different approach. She believed in a mix of incremental growth as well as sporadic acquisitions. In an interview with BusinessWeek, Ms. Johnson was quoted as saying, “But sometimes, they (incremental growth strategies) don’t work, and you’ve got to say: Let’s grind this baby to a halt.”
After Abigail Johnson took over, Fidelity allowed its portfolio managers to buy and sell aggressively in the open market. Unlike their competitors, the team at Fidelity didn’t follow any stock market indices. Ms. Johnson encouraged the managers at Fidelity to be even more aggressive with their acquisition strategies.
Abigail’s younger brother is currently working with the real estate division of Fidelity Investments. In May 2005, Ms. Johnson became the president of Fidelity’s Employer Services Company. The organization offers benefit, retirement, and HR services to various companies.
Abigail Johnson- Leading the Way
Today, Abigail Johnson is the President and CEO of Fidelity Investments. She is among the handful of women who are successfully managing a trillion-dollar mutual funds empire. Ms. Johnson rarely gives interviews to media channels and newspapers. However, she is a well-known and respected figure at the company’s Boston headquarters, where her colleagues call her “Abby.”
Combining her family’s inheritance with her own professional achievements, Abigail Johnson has become the fourth richest woman in the United States, with a net worth of $10 billion. Fidelity Investments has recently set up its own independent press called Fidelity Insight.
The editor at Fidelity Insight, Eric Kobren, talks highly of Ms. Johnson and praises her aversion to publicity tactics. Kobren remarks that Abigail is a calm and composed woman who works hard every day. He also notes that Ms. Abaigal is humble and down-to-earth and doesn’t really come across as one of the richest and most powerful women in the United States.
Abigail Johnson is a success story for all women who want to venture into the world of finance and make a name for themselves.
by Bobby J Davidson
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