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Breaking banking’s glass ceiling
Citigroup made history by appointing Jane Fraser as its next chief executive, making her the first woman to lead a major Wall Street bank when she takes over early next year. That makes us wonder: Who’s next? Here are some of the top contenders to break the glass ceiling in banking:
Executives who might take over their current companies:
Marianne Lake: A two-decade veteran of JPMorgan Chase, she now heads the firm’s enormous consumer-lending business. She was previously C.F.O., and after an executive shake-up last year has been considered a top contender to succeed Jamie Dimon.
Jennifer Piepszak: She succeeded Ms. Lake as JPMorgan’s C.F.O. last year as part of the executive reshuffle. Previously, the 25-year veteran of the firm ran Chase’s credit-card business. Like Ms. Lake, she is seen as a leading candidate to take over from Mr. Dimon — though her boss hasn’t indicated that he will step down anytime soon.
Cathy Bessant: She is currently Bank of America’s chief operating and technology officer, and a repeat winner of American Banker’s Most Powerful Woman in Banking award. Ms. Bessant is seen as a top candidate to succeed her boss, Brian Moynihan.
Rising stars on the cusp of C.E.O. contention:
Thasunda Duckett: She leads Chase’s consumer banking and has become one of the company’s most prominent faces — she was appointed to Nike’s board last year — and is one of Wall Street’s top Black executives.
Susan Huang: A co-head of Morgan Stanley’s investment banking business since 2018, Ms. Huang was one of the first women to run a big Wall Street investment banking division. She previously led the company’s U.S. mergers team.
Dina Powell McCormick: One of the Goldman Sachs’s most visible executives, she has also served in the George W. Bush and Trump White Houses. She’s currently responsible for winning business from sovereign clients.
Outsiders with banking experience:
Ruth Porat: Formerly the C.F.O. at Morgan Stanley from 2010 to 2015, she’s currently the finance chief at Alphabet, the parent company of Google. She may not want to return to Wall Street — but would she, if given the right offer?
Sarah Friar: As the C.E.O. of the social network Nextdoor, she may not be the most obvious candidate to take over a big bank. But Ms. Friar was previously the highly regarded C.F.O. of Square, where she led the payments company’s I.P.O. in 2015, and she sits on Walmart’s board. She spent more than a decade at Goldman earlier in her career.
Wall Street has questions about the timing of Ms. Fraser’s promotion. Though she had been seen as Citi’s next C.E.O. for months, and has won praise for her leadership, Ms. Fraser’s promotion may have come sooner than expected because of stumbles by her current boss, Mike Corbat, CNBC’s Hugh Son reports. Among them: Citi’s languishing stock price and its mistaken $900 million payout to creditors of Revlon, which raised questions about the bank’s internal controls.
• It wouldn’t be the first time a woman has been elevated to clean up a mess — the so-called glass cliff — and the banking analyst Mike Mayo wrote yesterday, “C.E.O.s don’t typically want to leave in the middle of a crisis, especially if upside is pending.”
• But Citi officials defended Mr. Corbat’s tenure and said his retirement next year had been in the works for some time. “Announcing his plans now allows ample time for a smooth C.E.O. transition, which was important to Mike given that he did not benefit from one,” a spokeswoman told CNBC, alluding to the sudden resignation of Mr. Corbat’s predecessor, Vikram Pandit.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, and Michael J. de la Merced and Jason Karaian in London.
Here’s what’s happening
Hopes for a new federal coronavirus stimulus before Election Day are fading. Senate Republicans’ $500 billion proposal for additional aid — less than what they had offered earlier — failed in a vote yesterday along mostly party lines. As the two sides dig in for the election campaign, the fragile economic recovery looks as if it will have to fend for itself.
JPMorgan Chase tells traders to return to the office. Executives told senior members of the bank’s sales and trading team to come back by Sept. 21, one of the most aggressive return-to-the-office plans by a major bank thus far. It’s part of a growing push by companies and government officials to bring workers back to offices.
Customers can’t get enough of Peloton. The at-home fitness company said that sales in its latest quarter were up 172 percent versus the same period last year, as new customers bought equipment and existing ones put in a lot more workouts during lockdowns. Peloton’s C.E.O., John Foley, told analysts that strong demand for the company’s exercise bikes means he expects order delays until June.
Rio Tinto’s C.E.O. steps down amid a controversy over the destruction of sacred sites. Jean-Sébastien Jacques and two other executives will resign after shareholders revolted over the mining giant’s willful destruction of prehistoric rock structures venerated by Australian Indigenous groups.
Brexit talks hit a new flash point. The European Union demanded that Britain withdraw legislation that threatens to undermine its withdrawal from the bloc, which British officials have conceded would violate international law. The chances of the messiest possible breakup when the Brexit transition period ends on Dec. 31 are rising. (Just in: Britain has signed a trade deal with Japan, its first since leaving the E.U.)
Has business left Milton Friedman behind?
This week, we have been previewing our special project with Apsny NewsMagazine to commemorate the 50th anniversary of Milton Friedman’s seminal essay, “The Social Responsibility of Business Is to Increase Its Profits.” Check out the magazine in print this Sunday to see the finished product, which features a host of executives, political leaders and Nobel Prize winners weighing in on the legacy of the so-called Friedman Doctrine. And also watch your inboxes for a special edition of DealBook on the same day.
A bonus for DealBook readers: We have published an extended essay by Andrew introducing the project. He spoke with Marc Benioff of Salesforce about balancing the concerns of shareholders and other stakeholders, and dug into Warren Buffett’s letters to reveal what the legendary investor makes of the rise of stakeholder capitalism. A sample:
Despite social responsibility being in vogue among C.E.O.s, and the voices of those — like myself — who have encouraged business leaders to be more empathetic, there remains an inconvenient truth for everyone seeking a more cuddly version of capitalism: If a company isn’t making profits for shareholders, it is very hard to take care of its other constituents.
Go even deeper on the debate with our latest DealBook Debrief call. If you missed it, here’s the recording of yesterday’s conference call with Delaware’s former chief justice Leo Strine Jr. and the Allbirds co-founder Joey Zwillinger. During the call, Mr. Strine raised an interesting question:
Do we need a “truth and reconciliation commission” for capitalism? The commission, composed of institutional investors and business leaders, would reflect on the issues that companies now say they champion: social injustice, climate change and the minimum wage, among others. “Could we now reflect on what we did not care about before?” Mr. Strine asked.
• Mr. Zwillinger of Allbirds said he wasn’t sure about the idea. He put the onus on the institutional investors who run pension funds on behalf of millions of Americans: “They should get together and advocate for companies to do things on behalf of those workers, not just to create the maximal profit but to create a just society that helps everybody.”
The most effective solution may be the law (said the former judge). “No doctrine of corporate law in the United States of America has made companies reduce the share of productivity and profit gains that go into the pockets of their workers,” Mr. Strine said. Instead, he noted, “the strong pressures that have grown from the market system” have resulted in “a natural shift toward the more powerful interests from the correspondingly less powerful ones — that is really the framework we have to change.”
Seen and heard
🍔 “There’s nothing worse than watching a home run get hit in Citi Field or Nationals ballpark where we have Shake Shacks right in center field. And I look at that, and I’m just like, ‘Oh, what I would give to be selling a Shack burger right there right now.’ But those cardboard fan cutouts, they don’t need much.” — Randy Garutti, Shake Shack’s C.E.O.
🦠 “I’d like to say there’s never a dull moment in our magic kingdom. But seriously, Covid has really thrown a wrench into a lot of our businesses.” — Christine McCarthy, the C.F.O. of Disney
🏖 “One of the things that we’re likely to see if there is remote work is it allows us to travel while we work for personal reasons as well. So, if I’ve got a remote week that’s happening, or if I’ve got a week that’s got a remote few days, I might as well go to the beach and work from there.” — Arne Sorenson, Marriott’s C.E.O.
Business chiefs take on de Blasio
More than 150 C.E.O.s have warned Mayor Bill de Blasio in a public letter that he needs to address crime and other quality-of-life issues in New York City, or risk endangering its economic recovery as they try to bring workers back to the office. It is a watershed moment in the tension between business leaders and Mr. de Blasio, who have never been particularly close.
“There is widespread anxiety over public safety, cleanliness and other quality of life issues that are contributing to deteriorating conditions in commercial districts and neighborhoods across the five boroughs,” the executives leaders wrote in the letter, organized by the Partnership for New York City, a business group.
• Among those who signed the letter are Albert Bourla of Pfizer; Rodge Cohen of Sullivan & Cromwell; Adena Friedman of Nasdaq; James Gorman of Morgan Stanley; Henry Kravis of KKR; Debbie Perelman of Revlon; Steven Roth of Vornado; Steve Schwarzman of Blackstone; Adam Silver of the N.B.A.; and David Solomon of Goldman Sachs.
Mr. de Blasio responded by challenging the C.E.O.s to back his bid for more borrowing authority. “Let’s be clear: We want to restore these services and save jobs, and the most direct way to do that is with long-term borrowing and a federal stimulus,” a spokesman for the mayor said in a statement. “We ask these leaders to join in this fight because the stakes couldn’t be higher.”
Executives are unlikely to endorse that move, and they have support from The Times editorial board, which recommended finding budget cuts before borrowing more. But the mayor has his defenders, too: The writer Anand Giridharadas derided the letter’s signers as “plutocrats,” tweeting, “Don’t you dare defraud our communities, defang our government, and defund public investment for years — and then write letters complaining about reaping what you have sown.”
In the papers
Some of the academic research that caught our eye this week, summarized in one sentence:
• Younger children are hurt more by coronavirus-related school closings than older children. (Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig and Irina Popova)
• “Stock market volatility during the coronavirus pandemic has been driven more by sentiment than substance.” (Josue Cox, Daniel Greenwald and Sydney Ludvigson)
• The rich aren’t better at investing than others, but they can afford to take bigger risks with higher payoffs. (Laurent Bach, Laurent Calvet and Paolo Sodini)
The speed read
• Today in blank-check company news: The SPAC run by Gary Cohn, the former Goldman Sachs president and Trump economic adviser, has reportedly raised $828 million; and Opendoor, the property-sales service, is said to be in talks to merge with Chamath Palihapitiya’s Social Capital Hedosophia II in a $5 billion deal. (Reuters, Bloomberg)
• The gaming software maker Unity is experimenting with a new bidding process for its I.P.O., in which it picks an offering price after potential investors enter their bids online. (FT)
Politics and policy
• The Justice Department charged 57 people with trying to steal a total of more than $175 million from the Paycheck Protection Program, which was meant to aid small businesses. (NYT)
• Why a Biden administration wouldn’t necessarily be any friendlier to China than President Trump’s. (WSJ)
• An analyst report making waves in the markets accused the electric truck maker Nikola of being “an intricate fraud built on dozens of lies.” (MarketWatch)
• President Trump said there will be “no extension of the TikTok deadline,” as its parent company looks likely to miss the White House’s deadline of Sept. 20 to sell its U.S. operations. (Bloomberg)
Best of the rest
• “Black Founders Matter” started out as a T-shirt design. Now, a once-jilted start-up founder is trying to turn it into a moneymaking strategy. (NYT)
• The story of the “lone wolf” billionaire at the top of China’s bottled water market. (FT)
• Listen to the trailer for Kara Swisher’s new podcast about power, “Sway.” (NYT)
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