(Reuters) - Visa Inc said Charles Scharf, a former head of JPMorgan Chase & Co's retail financial services division, will succeed Joseph Saunders as chief executive, effective November 1.
Visa's board had been looking for a successor to Saunders, 66, who has headed the company since 2007 and was expected to retire soon.
Scharf, 47, previously served on Visa's board from 2007 to January 2011.
Known as Charlie, Scharf was moved from JPMorgan's retail banking business to its private equity arm in 2011, after the lender shuffled several retail banking executives in a push to raise profit.
Scharf worked closely with Jamie Dimon, chairman and CEO of JPMorgan, when the two men were at Citigroup Inc in the 1990s. Scharf followed Dimon to Chicago-based Bank One, which was bought by JPMorgan in 2004.
Scharf is currently managing director at One Equity Partners, which manages $10 billion of investments and commitments for JPMorgan Chase.
"We believe Scharf's large-scale management experience is a good fit ... and our initial checks have been positive regarding his leadership style," Jefferies analyst Jason Kupferberg wrote in a note to clients.
Scharf's experience with JPMorgan will also help Visa. The bank is Visa's largest card issuer and accounts for about 10 percent of its profit, Kupferberg noted.
Scharf joins at a time that Visa, competitor MasterCard Inc, and card-issuing banks are trying to chart their courses through a storm of new digital technologies and companies that have come to the payments industry from outside of banking, such as eBay Inc's PayPal and Square Inc.
Analysts do not expect Scharf to spark major changes at the payment network.
"I think Visa is doing well. I think all he is going to be charged with is moving it forward in the same direction," Wedbush Securities analyst Gil Luria said.
The San Francisco-based company has already raised its full-year earnings forecast twice this year, as more people move to card-based payments globally.
Visa is scheduled to report fourth-quarter results on October 31.
Current CEO Saunders spearheaded Visa's 2008 initial public offering and will continue as executive chairman until March 31, after which Visa will appoint a new non-executive independent chairman.
Visa said Scharf would receive $950,000 per year in base salary and a bonus of up to 500 percent.
Scharf will also get a "make-whole" award of restricted stock and options worth $19 million, the company said in a filing with the U.S. Securities and Exchange Commission. The award is based in part of compensation Scharf is leaving behind at JPMorgan.
Saunders received $11.8 million in total pay in 2011, according to regulatory filings.
Shares of the credit and debit-card network were up less than 1 percent at $137.48 on the New York Stock Exchange on Wednesday afternoon.
(Reporting by Jochelle Mendonca in Bangalore and David Henry in New York; Editing by Supriya Kurane and Steve Orlofsky)