Flanagan's decision to leave Franklin for the top job at AMVESCAP, leaves Greg Johnson, grandson of Franklin founder Rupert Johnson, as sole chief executive of the San Mateo-based company, which operates the Franklin Templeton mutual funds. The decision becomes effective July 31.
According to the AP report, the Johnson family's grip on the company played a major role in Flanagan's departure.
"[Flanagan] never really felt like he was a true No. 1," CIBC World Markets analyst Kenneth Worthington said. "Now he can go to a place where he can really be the No. 1 guy."
Franklin Resources ranks among the nation's largest mutual fund companies with assets under management of $425 billion through June, up from $225 billion when Flanagan and Greg Johnson became co-presidents.