What makes a great CEO, in banking and in other industries? Leadership, honesty, compassion? Nope, it’s performance – specifically that of a company’s stock price, the results of a new survey suggest.
Career site Glassdoor just issued its annual Employees’ Choice Awards for the Highest Rated CEOs. The list features plenty of big names but just one banking head: Goldman Sachs’ Lloyd Blankfein. He finished 7th with a 95% approval rating. The report only published the top 50 names across all industries but digging into the website it looks like J.P. Morgan’s Jamie Dimon and Morgan Stanley’s James Gorman would have finished in a tie for second among bank CEOs with an 86% approval rating.
The one key factor when determining the popularity of a CEO among employees was share price. Just three of the top 25 ranked chief executives saw their firm’s stock price fall during the study period (April 2014 through April 2015). Moreover, seventeen of the 25 companies included in the list beat the S&P, meaning the stock was up 12.6% or higher year-over-year.
Goldman Sachs shares were up roughly 20% during that period, and have paced all banks since the crisis. The next best performers? J.P. Morgan and Morgan Stanley, employers of the second- and third-ranked CEOs on Wall Street, according to their workforce.
When looking at the best price-to-book value among all banks, Goldman Sachs, J.P. Morgan and Morgan Stanley each rank in the top four, finishing only behind UBS. Goldman Sachs and J.P. Morgan also have the best return on equity since 2008, and it’s not all that close.
The employee rankings make plenty of sense when it comes to banking. Obviously the leader of a successful company will rank highly, but as bankers get paid increasingly in deferred stock and less in cash, share price has become more important. It appears to be a huge part of how employees assess the performance of their boss.
CFA No More Than a ‘Hazing Ritual’ (eFinancialCareers)
Lewis Krell is a former investment analyst turned tech employee and journalist. When his former employer asked him to take CFA Level I, he obliged. That is until he realized that CFA exams are just a waste of time, or so he believes.
How to Score a Full-Time Offer at Deutsche Bank (eFinancialCareers)
We spoke to one former intern in Deutsche Bank’s investment banking division who managed to secure a full-time job. Here’s his advice on how others can do the same.
Robert James Ebert, Deutsche Bank’s head of Asia-Pacific equities trading, has been arrested after reportedly losing control of his Ferrari and striking a security guard outside of the office. The 53-year-old man died at the hospital the following morning.
Dimon Questions Warren (Bloomberg)
J.P. Morgan Chief Executive Jamie Dimon is never afraid to speak his mind. In the latest example, Dimon called out Senator Elizabeth Warren, a known Wall Street hater. “I don’t know if she fully understands the global banking system,” he said of Warren.
‘Unfortunate’ Hedge Fund Era Over For Whitney (Bloomberg)
Meredith Whitney’s foray into hedge funds was a short one. The former star analyst told Fox News “that chapter of my life is over…this whole experience has been highly unfortunate and I’m putting it behind me.” Whitney’s firm, Kenbelle Capital, was sued by its anchor investor that was looking to redeem all assets after just one year. She said she returned money to investors at the end of May and is looking to get back into analyzing financial stocks.
‘A Bit More Restraint’ (WSJ)
Following heavy shareholder criticism, real estate investment trusts are changing the way they pay executives to emphasize long-term performance.
Background Check Effort Needs Fine Tuning (WSJ)
Finra’s efforts to update broker records to unearth undisclosed tax liens and other hidden financial and legal matters have been hit-and-miss. They’ve identified some sketchy brokers who have been fired but have also frustrated firms with inaccurate information and mountains of unnecessary paperwork. Lots of false-positives.
Buzz Around the Office
Hedge fund billionaire Steve Cohen keeps a 150-pound pet pig named Romeo at his sprawling Connecticut estate. It has its own room that is likely nicer than most homes. Sadly, he is sending it to a Florida sanctuary because Romeo has gotten too big. The family threw him a going away dinner party though
Quote of the Day
“I believe that the CFA Institute has backed itself into a corner by allowing absolutely anyone in the world to take this test, and to take it is as many times as they want. Because of this, an oversupply is coming.” – former investment analyst Lewis Krell on the diminishing value of a CFA.