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Today's Top News1. The most powerful women in banking
I recently noted "the most powerful women in finance," as determined by the American Banker, and now it's time to take a look at the sister ranking: The most powerful women in banking. At the top is Irene Dorner, the CEO of HSBC USA. An Oxford-trained lawyer who has spent most of her 33-year career with HSBC, Donner "was dispatched to New York in 2010 to help the company's U.S. business regroup. Testifying on Capitol Hill this summer, she showed why it was smart to entrust her with the task. She struck just the right notes of respectfulness, resoluteness and reconciliation with the Senate panel probing the bank's AML problems. She promised to fix things, and left no room for doubt that she would." The runner up is Beth Mooney, chairman and CEO of regional power Keycorp since Spring of 2011. She's the first woman to serve as chairman and CEO of a top 20 bank in the United States. At Keycorp, she doubled net income to $857 million and reduced non-performing assets 36 percent to $859 million-results. The number of buy ratings on the company tripled has tripled to 12 recently. Rounding out the top five are Karen Peetz, vice chairman and CEO for financial markets and treasury services at BNY Mellon; Ellen Alemany, chairman and CEO at RBS Citizens Financial Group and head Of RBS Americas; and Pamela Joseph, vice chairman of payment services at U.S. Bancorp. As for the traditional "bulge bracket" banking giants, the first executive listed is Cathy Bessant, global technology and operations executive at Bank Of America, at number eight. For more: Related articles: Read more about: CEO, Wall Street women
2. Wall Street loses luster with recent grads
At Harvard Business School, the percentage of MBA graduates this year accepting investment banking jobs fell to 7 percent from 10 percent. The Wharton school sent 16.6 percent of its most recent class into Wall Street jobs, about the same as the previous year, compared with more than 25 percent in 2008. As noted by the Financial Times, school officials say the mix of jobs that graduates are accepting has shifted. For those bent on Wall Street, more seem to be opting for hedge funds and private equity funds, foregoing the more traditional first jobs at the bulge bracket firms. That trend is disconcerting to the traditional sell-side powerhouses. Much has been made of the decision by Goldman Sachs to get rid of its traditional two-year training program, which only rarely resulted in a job offer. New hires are no longer expected to leave the firm after two years, as the bank apparently would rather hang onto them. At a minimum, it wants to create that perception. "For those who decide to stick with Wall Street, pay packages are down but not to penurious levels. Graduates who land a job at JPMorgan Chase, Goldman or Morgan Stanley can earn $60,000-$70,000 in their first year, with a potential bonus of one to two times that salary, according to recruiters. MBA graduates typically earn about $90,000-$100,000 in salary with a similar proportion of bonus on top." In the end, money is what draws young people, especially those with lots of debt. At Harvard, the percentage of graduates going into consulting hit 29 percent last year. The consulting money is just as good initially, as it's where the jobs are at the moment. Longer-term banking, however, may offer more salary upside.. For more: Related articles: Read more about: recruiting, jobs 3. Hedge funds may not soon embrace advertising
Recall that the JOBS Act ended a ban on the solicitation and advertising of certain non-registered securities, which has some hedge funds giddy with anticipation. Now companies will be permitted to use general advertising in support of securities offerings according to Rule 506 of Regulation D of the Securities Act and Rule 144A of the Securities Act. As with other aspects of the JOBS Act (notably the change to the quiet period on new stock offerings), it's unclear how quickly the industry will move to take advantage of their new freedom to advertise. The big asset managers have been rather mum on the issue, as all are pondering what to do. But Bloomberg notes that, "The law may give the biggest advantage to firms with trillions of dollars in assets and create a divide between asset managers that offer hedge funds, private equity and other alternatives and those that don't." The biggest funds companies tend to have their marketing down solid, and it's unclear how general advertising would meaningfully enhance those efforts. Recall that alternative asset managers have not been relieved of any accreditation and "qualified purchaser" burdens. So they can't accept investments from just anyone. Smaller hedge fund firms, however, may sense a greater opportunity to enhance their brand in traditional media. All in all, it's still a bit early to say that the law will have a profound impact on hedge funds and private equity funds marketing. For more: Related articles: Read more about: Hedge Funds, advertising 4. How Ina Drew's career unraveled
Ina Drew had scaled the heights at JPMorgan Chase, ending up as a trusted lieutenant of CEO Jamie Dimon and head of the CIO office, which invested $350 billion of firm money. In the end, she was brought low by the London Whale, whose untimely and shocking "hedges" stuck the bank with $5.8 billion in losses over two quarters--all on her watch. If anyone doesn't think that Wall Street business at this level is a cruel sport, check out this reporting from the New York Times Magazine: "By the second week in May, the stress had taken a toll. A colleague saw Drew walking around the executive floor, her mascara smeared. A slight tremor in her hand left over from her illness seemed worse, a physical symbol of her emotional state. Although she still came to work dressed impeccably, she had lost weight and looked somber, almost shut down." It was not long after that she resigned amid a storm of criticism. She was eventually asked to give up two years of compensation. It was an unfortunate end to what had been a stellar career, one that all of us, men as well as women, can applaud. The good news is that she will undoubtedly enjoy a second act. She has put herself in position to pick from what will eventually be terrific options. It will be interesting to see what she opts for, as her path may take her far from Wall Street. For more: Related articles: Read more about: JPMorgan Chase, London Whale 5. Protestors target Wells Fargo CFO
It's not easy being a top executive of a big bank. In several cases, angry protests have hit close to home--literally. Consider the CFO of Wells Fargo, Tim Sloan. Granted, he's not Lloyd Blankfein or Jamie Dimon. Nevertheless, he has been in the local news in the San Marino, California area on several occasions recently as protesters have taken to the streets right in front of his personal residence. The optics were obviously less than ideal. One of the protesters was disabled and refused police orders to disband, which led to a police stand-off and the arrest of the disabled protestor. That made for juicy media stories. Eventually, the city passed some restriction on picketing homes, but the protestors have continued to fight, making Sloan their personal target. A professor at Occidental College has taken up the cause: "Wells Fargo CFO Tim Sloan makes $8 million a year and lives in a $5 million house in San Marino, a wealthy Los Angeles suburb. His bank is trying to evict Ana Wilson from her tiny home in blue-collar South Gate. Wilson, a wheelchair-bound woman with cerebral palsy and breast cancer, missed several mortgage payments while she was in the hospital. Frustrated by Wells Fargo's refusal to renegotiate her loan, Wilson went to Sloan's mansion to protest her mistreatment. San Marino cops arrested her. Who is the real criminal here?" This is an uncomfortable position for the bank to be in, and to a certain extent it all reflects Wells Fargo's status as the new powerhouse in the mortgage market. I've said all along that it should expect heightened media coverage at every turn--call it the Bank of America treatment--a terrific challenge from community relations and public relations folks. For more: Related articles: Read more about: Wells Fargo, Protests Also Noted
SPOTLIGHT ON... Shareholders confront banks on pay Unfortunately, shareholders of big banks and employee of the bank are not always aligned. When it comes to relatively high compensation ratios, some shareholders are starting to take a harder line. "So far, much of the jousting is taking place behind closed doors. But the debate over whether investment banks should keep devoting roughly 50 percent of revenue to employee compensation is starting to enter the public realm through proxy battles and as more large shareholders speak out on the issue," Reuters notes. It will likely be an active proxy season in 2013. Article Company News:
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Friday, October 5, 2012
| 10.05.12 | The most powerful women in banking
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