U.S. Bank President Gunjan Kedia will become the lender’s next CEO on April 15, the bank said Tuesday.

She’ll replace Andy Cecere, 64, who will transition to an executive chairman role after nearly 40 years with the bank, including as CEO since 2017.

Kedia, 54, will become U.S. Bank’s first female CEO and serve as the second woman to lead a top-10 American bank, alongside Citi’s Jane Fraser, who has held her role since 2021.

“It’s an honor to be trusted to lead a wonderful company like U.S. Bancorp into the future,” Kedia wrote in a LinkedIn post Tuesday. “I look forward to working with the very talented team across the bank as we continue the meaningful work to build lasting relationships with millions of clients navigating some of the most important moments in their lives and organizational journeys.”

Kedia’s base salary and target annual cash incentive award have not yet been determined, although she will receive an annual long-term incentive award, valued at $10 million as of a Feb. 27 grant date, the bank said in a securities filing. Of that award, 60% of its value will come as performance-based restricted stock units and 40%, restricted stock units. 

Kedia was promoted to president last May, overseeing the bank’s three lines of business: wealth, corporate, commercial and institutional banking; consumer and business banking; and payment services. 

Prior to that appointment, she had been the $678 billion-asset bank’s vice chair of wealth, corporate, commercial and institutional banking. She joined the bank in 2016, after holding previous positions at State Street and BNY, as well as consulting firms McKinsey and PwC. 

While the choice of Kedia wasn’t a shock, the timing seemed to be for analysts who cover the company. 

Cecere stepping down “comes as a surprise to us,” Royal Bank of Canada analyst Gerard Cassidy wrote in a Tuesday note.

“At the company's investor day in September, there were no apparent signs of him looking to step down as CEO, in our opinion.”

Based on the bank’s 2024 proxy filing, Cecere will be eligible for about $32 million in benefits when he retires, Cassidy noted.

Cecere’s compensation as executive chairman has not been determined yet, the bank said.

Wells Fargo analyst Mike Mayo said the move seemed “rushed” and noted he’s advocated for the bank to look externally for its next CEO, citing recent underperformance.

“We have questions about the governance of the board and their process for vetting a range of possible external candidates,” Mayo wrote.

Piper Sandler analyst Scott Siefers wrote that Cecere had been president for a longer period of time before he took the CEO post than Kedia has been — and that Cecere had been U.S. Bank’s chief operating officer and CFO prior to that.

Given that, “the market had perhaps had more time to prep itself for the most likely transition and gain comfort with it,” Siefers wrote.

Kedia’s appointment means “a seamless transition and little strategic change,” Siefers wrote. But she will take the CEO reins at a “pivotal” time for the bank, as it’s faced pressure more recently to deliver positive operating leverage following its acquisition of MUFG Union Bank and other investments. 

“Kedia will immediately be on the hot seat to deliver better results to impatient investors,” Siefers wrote.

Internal, regulatory or shareholder pressure might have accelerated the leadership transition, said Jacob Gamble, a principal and executive recruiter at Cowen Partners.

“We all know we want quick wins up front when we start a new job,” Gamble said. “If the bank has thought through this, then maybe she gets moved in quicker than we had anticipated because they see two or three wins that they’re going to get done in the next 60 days. ... If they don’t have some quick wins to show this kind of strategic shakeup, I think that’s going to be harder for the bank.”

Roland Hernandez, U.S. Bank’s lead independent director, said the company is “grateful to Andy for his years of service to the company and especially his stewardship as chairman and CEO for nearly eight years.” 

“We look forward to his ongoing guidance as the company’s executive chairman,” Hernandez said. “At the same time, we are inspired by Gunjan’s vision for the company, and we are confident in her ability to guide U.S. Bancorp into a vibrant and engaging future that honors the past while achieving new possibilities.”

Kedia will take the CEO reins at U.S. Bank’s annual shareholder meeting.