Euromoney's past coverage of Vikram Pandit
Euromoney's coverage of Grant Kvalheim
Merrill Lynch had two co-presidents flanking Stan O’Neal but, as Stan started to topple, neither was considered quite right to succeed the big guy. How many people work at Citi? Perhaps 325,000, roughly the size of Pittsburgh. Surely one individual could have been found to replace pallid Prince permanently when he was chucked out? Instead, Sir Win Bischoff and Robert Rubin were wheeled out as an interim management solution. Is "dynamic duo" the right phrase to describe the odd couple of aristocratic Brit and American Jew? Or is it rather a cautious pairing of two respected elder statesmen?
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“Investment banking is one of the most
highly paid global industries, and its
ranks are infused with the intelligent.
So how come when two of the top
institutions lose their leaders, there is
such a scarcity of potential successors?” |
As a former investment banker, I was always amused (and sometimes bemused) by the pointless platitudes senior management utter. A phrase beloved of many banking bosses is "We have a deep bench of talent at XYZ Securities." If you prod that phrase with a stick, it is revealed as a pile of rubbish. Why talk about "deep bench?" What’s wrong with "sturdy table"? And "talent" is a word only the pretentious use. Talent for what? Tap-dancing around the bedroom, cleaning floors, writing poetry? Could the phrase be any more meaningless? Anyway, in these crisis months, the investment banking "deep bench of talent" has collapsed faster than the net asset value of a swooning SIV.
Investment banking is one of the most highly paid global industries, and its ranks are infused with the intelligent. So how come that when two top
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"Sir Win Bischoff and Robert Rubin were wheeled out as an interim management solution. Is ‘dynamic duo’ the right phrase to describe the odd couple of aristocratic Brit and American Jew? Or is it rather a cautious pairing of two respected elder statesmen?" |
financial institutions lose their leaders within a week of each other, there is a scarcity of potential successors? Only two individuals were tipped for the top vacancies: John Thain, former president of Goldman Sachs, and Larry Fink, chief executive of BlackRock. Where has the deep bench of talent for the investment banking industry gone? A mole commented: "The problem is that bankers become so specialized that very few have an overview and vision that would enable them to run a multi-faceted firm." And, of course, investment banking rarely breeds good managers. The emphasis and rewards all line up for producers. Those who enable the producers to produce risk being felled when fallow times fall and never engender much respect when the good times roll.
The concept of an interim chief is fascinating because it is unclear whether it implies high status or has a whiff of yesterday’s man. I’m beginning to believe that being an interim is not as prestigious as it sounds. There might be an aura of "Won’t mess up before we get the right person in place" about it. Think: steady hand on the tiller rather than formula one superstar. For example, at Merrill Lynch, Alberto Cribiore, the interim non-executive chairman, lasted a mere two-and-a-half weeks before he was hustled off stage. Hardly enough time to move into the spacious corner office and commission a few pieces of tasteful sculpture to adorn it.
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"Alberto Cribiore, the interim non-executive chairman at Merrill Lynch, lasted a mere two and a half weeks before he was hustled off stage. Hardly enough time to move into the spacious corner office and commission a few pieces of tasteful sculpture to adorn it" |
A source sniffed: "You need a chap who understands that this is a limited assignment. You don’t want someone who, having had a taste of power, will cling on in crazy stalker-like fashion. Avoid Isildurs is my advice." Isildur, a character in JRR Tolkein’s Lord of the Rings, refused to part with the ring once it came into his possession. In other words: overweening ambition is out, you’re looking for someone who has already climbed Mount Everest and is winding down graciously. So personalities like the former US secretary of state, Alexander Haig, need not apply. After the attempted assassination of president Ronald Reagan in 1981, Haig allegedly declared: "The helm is right here and that means right in this chair for now." As the credit crunch curdles further, a new concept will haunt bank boards: interim planning and how to make it clear to the chosen interim that his time at the top is temporary.
Do say: We value your experience and knowledge of the firm.
Don’t say: We’ll give you a rolling three-year contract.
I hear whispers that a reshuffle took place at Barclays Capital in September. Responsibility for credit trading (including collateralized debt obligations) was removed from co-president Grant Kvalheim and given to that other co-president, the diminutive but dapper Jerry del Missier.
Could it be that one co-president is more in command than the other? Kvalheim retains investment banking, primary capital markets and the loan business. "I’m not sure Grant’s tenure can be taken for granted," a mole murmurs. "After all, he must have been behind the decision to purchase a sub-prime originator at the start of 2007." It is true that Barclays Capital did purchase Equifirst Corporation in January. However, it paid just $225 million. So while the value of that acquisition would probably be marked down to an anorexic zero today, other firms made the same mistake and vapourized much more money.
Another source claims that although no memo was circulated regarding the reallocation of co-presidential tasks, Kvalheim’s future role would include liaising with the mighty (and perhaps ever-so-slightly grumpy) Asian shareholders. "And where does that leave the present head of Asia-Pacific, Robert Morrice [chairman and chief executive of Barclays Asia]?" a source wondered. "Shouldn’t Morrice be the one mollifying the out-of-pocket Asian investors?"