Skip to Content
Stock Analyst Update

CEO Change at Franklin Resources Could Be Beneficial

We do not anticipate changes to our moat rating or our fair value estimate as a result of the change of leadership.

Mentioned:

We were not too surprised to see Greg Johnson step aside at narrow-moat rated Franklin Resources (BEN) this week, having served as CEO of the firm since January 2004 and chairman of the company’s board of directors since June 2013. Greg will remain on as non-executive chairman, while his sister, Jenny Johnson, who has served as president and chief operating officer since December 2016 assumes the role of president and CEO. We do not anticipate making any changes to our moat or stewardship ratings, or our $28 per share fair value estimate, as a result of the change of leadership.

Franklin Resources has been run by a Johnson since its beginnings as Franklin Distributors in 1947, with the family continuing to own close to 40% of the company’s common stock. This arrangement has left the Johnsons with a significant amount of influence over the operating and investment strategies employed by the firm as well as the makeup of the board of directors.

While management has been frugal with its capital-allocation decisions over the years, sticking to a long-term strategy of continuing to invest in its business, maintaining financial strength and flexibility, and returning a substantial portion of earnings to shareholders as share repurchases and dividends, it has been lackluster at times about attacking deficiencies in Franklin’s operations.

As such, we are encouraged by the move to have Jenny Johnson take the helm, given that she has had a bit more fire in her belly the past few years about getting Franklin attuned to a rapidly changing asset management landscape. She’s been the driver behind several key acquisitions and investments, including the development of Franklin’s ETF operations, the build out of the firm’s data science capabilities, and the adoption of several fintech initiatives.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Greggory Warren does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.