Blankfein IPO cheque, anyone?
Is it time for bank CEOs to put their IPO money where their mouth is?
Arian Foster is a 27-year-old running back for NFL team the Houston Texans. Last year, he signed a $40 million three-year contract with the franchise.
But that’s not enough. A company called Fantex Inc has filed documents with the SEC ahead of an IPO of Foster – or, more accurately, his future earnings.
Fantex will sell just over 1 million shares in Foster at $10 a share. For that, investors will get a 20% share of Foster’s future career earnings. For an injury-prone player in a sport where career-threatening injuries can happen at any time, that seems one hell of a risk.
But it made us think: what if bankers were to IPO their own future careers? After all, they spend a lot of time and effort, and earn a lot of money, persuading companies to do the same. Is it time for bank CEOs to put their IPO money where their mouth is?
A quick look at the global ECM league tables sees Goldman Sachs sitting pretty at the top. Last year, its chief, Lloyd Blankfein, earned a package of more than $20 million. What would he be worth in an IPO of his future earnings?
Then again, Goldman is arguably the best investment bank out there. And Blankfein shows no sign of leaving – Mike Evans is the latest in a long line of potential successors to quit the firm. We think he’d be a good investment.
Second in the ECM league tables is JPMorgan. If its chief, Jamie Dimon, had undertaken an IPO of himself two years ago he would certainly have had the highest market cap of any individual banker.
But with JPM assailed from all sides since the London Whale fiasco, and several multi-billion dollar fines pushing the bank into losses, Dimon’s personal stock would now be plummeting. Our call: sell Jamie.