Not Going On TV And Telling Regulators To “Regulate This [gestures at crotch]” Working Out Pretty Well For Mike CorbatBy Bess Levin
Back in the day, as in pre-financial crisis, it was okay– nay, encouraged– for a bank chief executive officer to conduct himself in a brash, swaggering manner that communicated a general message of “I do what I want and if you don’t like it, suck on this.” Regulators were peons to be told where to go, the pages of the Journal were a place to thump their chests. San Pietro was a place for holding court while knocking back 9 martinis. If you didn’t like what they had to say, too damn bad.
Somewhere in the last couple years, though, things started to change. People no longer wanted to hear executives who helped cause the global financial crisis tell the world why they were right and you were wrong. Responding to calls that enormous bonuses struck an out of touch tone by inviting CNBC into their offices, dropping trau, telling the cameraman “you’re gonna wanna zoom in on this,” and rolling around in a pile of money with abandon was no longer as effective as it once was. Regulators no longer took kindly to receiving FedEx packages that included photographs of CEOs using pages of, for example Dodd-Frank, as toilet paper with a gold star atop that read “You tried.”
Some bank execs have been slow to catch on to this shift. Mike “can you spell that again” Corbat is notable in that he has not.
Michael L. Corbat, head of one of the biggest banks in the world, recently strolled through Marea, the Central Park South restaurant where Manhattan’s elite go to be seen. No one in the crowded room even looked up. A top New York lawyer dining there that evening was asked about Mr. Corbat. “Mike who?” he said. Flying under the radar appears to be just fine with Mr. Corbat — and with Citigroup, the financial giant he has run since October 2012. To be a prominent face of Wall Street at a time when banks are feeling the heat from federal authorities on a number of fronts clearly has its drawbacks. Mr. Corbat’s counterpart at rival JPMorgan Chase, Jamie Dimon, has been widely viewed as the point man for the bank as it wrestles with investigations by at least seven federal agencies, several state regulators and two foreign nations. And under Mr. Dimon, JPMorgan has in just a few years gone from a Washington favorite to a magnet for government scrutiny. The low-key approach taken by Citigroup — which faces a number of investigations of its own — has not gone unnoticed inside JPMorgan. Some board members and executives there have recently pointed to Mr. Corbat in privately discussing the apparent advantages of a more self-effacing approach in a chief executive…The change for Citigroup has been swift. Before Mr. Corbat took over, for example, the Fed dealt an embarrassing setback to the bank in 2012, when it failed the bank on the so-called stress test, an important measure of financial health, rejecting its proposal to buy back its shares. Just a year later, however, with Mr. Corbat at the helm, the bank handily passed the stress test. Its stock is up more than 40 percent since he took the top job.
Indeed, after he became chief following the ouster of Vikram S. Pandit, Mr. Corbat told advisers, including the public relations chief Edward Skyler, Susan Kendall, the head of investor relations, and John C. Gerspach, the chief financial officer, that he wanted to maintain a low profile, focusing on meetings with regulators, clients and analysts…That approach has even managed to win over one of Wall Street’s most vocal bank analysts, Michael Mayo, who had been a vociferous critic of Citigroup before Mr. Corbat’s appointment as chief. At the bank’s annual meeting in April, Mr. Mayo, whose approach to the microphone at such meetings usually involves a critical remark, lauded the bank. “The Mike and Mike show is off to a great start,” Mr. Mayo said, referring also to the bank’s chairman, Michael E. O’Neill.
If the Mayo love seems inconsequential, consider that not too long ago, the analyst was giving former chairman Dick Parsons two weeks to resign, talking public trash about the bank’s ATMs, and releasing the oh no he di’int statement that “Asking Vikram Pandit about the crisis in capitalism is like asking Alec Baldwin about airplane etiquette.”