One way to make a lot of money in banking is just to be really good at it. But this is not a very good way! There are lots of people who want to make a lot of money in banking, and all of them1 have at least considered the approach of “just be good at it,” so you have no real competitive edge if that’s your strategy. You need to be creative and think outside the box, as you might say, if you were not very good at banking, as the law of large numbers says you are not.
“As we continue to reduce costs, continue to optimize our capital and we continue to have momentum on the client side we think we will be able to improve our return on equity toward that 15 percent target,” Dougan said in an interview with Bloomberg Television. “That’s something that’s achievable.”
I had so much hope! I mean, “reduce costs” is boring and sad, and “momentum on the client side” is just like “be good bankers” which whatever, but “optimize our capital” could mean all sorts of devious things.
It probably does but I couldn’t find them. I mean, other than the usual devious things, which start with “Basel II.5 core tier 1 ratio increased by 2.2 percentage points to 14.7%, total capital ratio increased by 1.0 percentage point to 21.2″ and segue right along into this funding stack: Read more »
…compensation costs remained stubbornly high, due in part to management’s decision to pay employees most of their bonuses immediately, rather than deferring big portions of pay to future years as some rivals have done. “We are very comfortable with our approach on deferrals at the firm and we didn’t need to increase it,” Chief Executive Kenneth Jacobs said in an interview. “There’s just no free lunch there.” [Reuters]
The Satisfaction Of Punching Each Other In The Face Was Totally Worth $20 Million to JPMorgan And Goldman SachsBy Matt Levine
When we saw that three boutique banks represented Google and Motorola Mobility in their deal, we were a little puzzled about why. Not that it’s unusual to hire Lazard, Centerview or Qatalyst, but after reading Felix Salmon‘s lament for the breathless pre-market M&A scoop we wondered if that supplied the explanation. Maybe Google and Motorola left out the big banks because they have kind of a deserved reputation for leaking deals, and because keeping news quiet is easier at a smaller shop than at a place with thousands of public-side employees? But on further inspection that theory kind of fell apart, as trading in MMI suggests that the deal may have leaked last week.
The New York Post has what seems to be the correct explanation: Motorola had actually spent a lot of time with full-service bulge bracket investment banks recently, and had come to the considered conclusion that they’re all a bunch of dicks.
Read more »
William Cohan’s portrait of Bruce Wasserstein in the latest Vanity Fair sheds a bit of light on the events surrounding the Lazard chairman’s mysterious death last October.
But one thing is clear: Most of the deceased dealmaker’s colleagues thought he was a selfish asshole who took home a giant paycheck without doing much to deserve it. Several Lazard partners even tried to stage a coup to oust Bruce and approached the board about his enormous pay package in 2008, Cohan reports. But the board eventually feared shareholder lawsuits if Bruce left and the stock dropped.
Here’s one Lazard banker’s take:
“The difference between his perception of his value and everybody else’s was a wide chasm. If you want to look at him in the best light, you would say he just had an incredible view of himself. If you want to look at him in the worst light, you would say he didn’t give a damn. He just could take the money. He could convince the board, and he took it.”
Developing: The Securities and Exchange Commission has filed civil charges against four people allegedly involved in a “serial insider-trading scheme.” One is a former employee of Lazard Freres, another of Texas Pacific Group.
The ex-Lazard employee, Adnan Zaman, has already settled the charges without admitting or denying any wrongdoing.
SEC Charges Former Employees of Global Firms in Serial Insider Trading Scheme [press release]
A month after Bruce Wasserstein’s sudden death, Lazard has a new CEO. Kenneth Jacobs, the head of the legendary investment bank’s North American business, has been named to succeed Wasserstein.
Jacobs was the unanimous selection of Lazard’s board.
In addition to Jacob’s appointment, Lazard added another potential CEO candidate, Gary Parr, to its board of directors and named him vice chairman. Ashish Bhutani was also tapped as a vice chair, while Steven Heyer was named to the new post of lead director.
Antonio Weiss was appointed global head of investment banking.
Jacobs Named Lazard CEO [WSJ]
Lazard Names Jacobs as Its New Chief [NYT]
Bruce Wasserstein Not Stepping Down But Here Are A Few People Who Could Take His Job In The Event Things Take A Turn For The WorstBy Bess Levin
Lazard said in a statement yesterday that Bruce Wasserstein is “stable and recovering” after checking into the hospital with an irregular heartbeat, and gave no indication the CEO would step down from the firm or cut back on his responsibilities, necessitating the need for someone else to take over. But what do you say we come up with some names, just for kicks? Wass will likely make a full recovery, so it’s not as morbid as it seems, and Ken Lewis is mulling putting his plans to retire on ice* so we needn’t waste our time coming up with a successor for him.
Last Tycoons author William Cohan thinks Vice Chairman Steven Golub would be a likely candidate to take over cause he’s “old-time Lazard guy who has a done a very good job of continuity in terms of bridging the old Lazard and the Bruce Lazard.” Charlie Gasparino is working the phones and will have some wild card names for you to place odds on shortly. Hopefully all of this talk will be for naught, however, because Dick Bové cannot say good-bye to another CEO (she’s holding it together for now but could blow at any second):