October 8, 2007
The bank bosses who could lose their jobs
The credit squeeze has left a lot of banks looking foolish. The chief executives of those that have suffered the most are under pressure and several have forced subordinates to carry the can.
Warren Spector, former co-president of Bear Stearns, Huw Jenkins, former head of UBS’s investment bank and Osman Semerci, former head of fixed income at Merrill Lynch, are among those who have been forced to depart.
But that does not mean their bosses are safe. So here, in descending order, are the top three Wall Street chief executives who are most at risk.
1. Chuck Prince of Citigroup. Mr Prince (above) was not popular even before the credit squeeze. Citigroup had not been performing well and even Citigroup executives admitted that they had to do better, but were pinning their hopes on a recovery this year.
I wrote a column in April arguing that "If Citigroup has not enjoyed a period of peace at the top and growth on the bottom line by this time next year, he should walk the plank." Hmmm. So far it does not seem to be going that well, as a report in the New York Times yesterday detailed.
2. Jimmy Cayne of Bear Stearns. Mr Cayne, who is 73, steered Bear Stearns adeptly after taking over from Alan "Ace" Greenberg in 1993. Until this summer, that is, when problems at two Bear hedge funds gave an early sign of how the credit squeeze would cause pain across Wall Street. By jettisoning Mr Spector, Mr Cayne has retained his grip but his bank, and his authority, have both suffered.
3. Stan O’Neal of Merrill Lynch. The chances of Mr O’Neal having to resigned are diminished by his Kim Jong-Il like ability to squelch any internal dissent with periodic purges, as reported by the Wall Street Journal this morning. But Mr O’Neal is responsible for pushing Merrill away from its traditional roots in retail broking and into fixed income trading. When things go wrong, it helps to be popular; Mr O’Neal is not.
