Franklin Resources Inc., the biggest publicly traded money manager by market value, Tuesday promoted four executives to a new office of the president, paving the way for succession at the family-run firm.
Among those promoted were two sons of Chairman Charles B. Johnson, 66. Chuck Johnson, 43, is president of Templeton Worldwide Inc. and Greg Johnson, 38, is president of Franklin Templeton Distributors Inc. The others were Martin Flanagan, 39, chief financial officer, and Allen J. Gula, 45, chief information officer.
"It will give the younger executives the opportunity to develop their skills," said Charles Johnson, whose San Mateo, Calif.-based firm manages about $218 billion. "I will remain as chief executive with only the four of them reporting to me," rather than the dozen or so executives that he now oversees.
Johnson is known as a hands-on manager. Until 1980, he insisted on approving every check.
Analysts said the reorganization makes sense.
"Charlie is approaching an age where it is natural that succession comes into play," said Burton Greenwald, a money-management consultant.
Henry McVey, an analyst at Morgan Stanley Dean Witter & Co., upgraded Franklin's market-lagging stock to "outperform" from "neutral," with a target of $40.
McVey said he expects flows into Franklin's international funds to improve and believes the reorganization will accelerate other changes at the fund group. The stock is also relatively cheap, he said, trading at 15 times his earnings-per-share estimate for 2000.
The stock is down 26% in the last 12 months as Franklin's "value"-oriented investing style and foreign interests (the Templeton branch of the Franklin-Templeton mutual fund family) remain unfashionable.
Franklin shares (BEN) fell 50 cents Tuesday to close at $32.94 on the New York Stock Exchange.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Franklin's Rough Ride
Shares of mutual manager Franklin Resources, which announced a reorganization Tuesday, remain well off their peak. Monthly closes since January 1998 and latest:
Source: Bridge News