Here's the kind of refreshing, self-harming honesty that we prize at Dealbreaker dot com.
As Bloomberg reported a few weeks back, Tower Research Capital founder Mark Gorton is publicly stepping back from the CEO role to become chairman of a firm that now has a board, apparently. Gorton was rather blunt in his self-criticism to Bloomberg, but Dealbreaker is now in possession of the email that Gorton sent to staff announcing his new role, and the language use is almost bracingly honest:
As Tower has grown, the management and organizational structure of the firm has evolved; however, in some ways, I have still managed Tower in the informal ways of a smaller company. I have set Tower’s strategy myself without a process for getting buy in from the senior leadership of the company, and much of the strategy development, planning, budgeting and scenario planning for Tower has been done in my head which has prevented people from having a proper understanding of the strategy, priorities and direction of the firm. I have prided myself on Tower being nimble without a lot of process overhead, but this nimbleness sometimes appeared jerky and confusing to people not privy to my thinking.
Wow, okay, buddy. That's...a lot.
And we can't help but wonder how much more scrutiny Gorton's decisionmaking [which has never been in the mainstream of mainstream] is under after his tabloid moment this winter when he spent some time in court arguing over the amount of child support he owes a 23-year-old woman.
Then there's also the matter of Tower's business model being weakened substantially by not being Citadel and Citadel moving into its space with some friends, plus the market making less and less sense. Gorton does not seem shy about Tower's recent performance being perhaps a reason for why he's stepping aside:
In a separate but related change, I will be stepping back from the job of CEO and handing the role of CEO over to Albert An. For the last year, Albert has been assuming more and more responsibility for running Tower. One of Albert’s great strengths is that he moves into organizational voids and takes responsibility for doing what no one else has been doing. In recent months, Albert has continued to step up and take on tasks that were my responsibility.
As Albert succeed running aspects of Tower where I had been stuck, I began to see that not only was he suited to take on more responsibility, but that he was better at many aspects of my job as CEO than me. Having been CEO of Tower for over 20 years, I had assumed, without examination, that CEO was the job I was supposed to have and that I was especially qualified to run Tower. Over the last couple of months, I have gone through a process of self-examination and realized that Albert would make a better CEO of Tower than me. My strengths at vision, strategy and leadership will be better expressed with me as board chairman.
Okay, this is a Whitney Tilson-level confession of hitting the limits of your personal skills. And we have to say we respect the hell out of it. Usually, this is where we'd write that "For whatever reason, Gorton has not been doing a great job running his hedge fund" but we don't have to because he just told us why: He's bad at it compared to other people who work for him. This strain of candid self-criticism also distracts us from bringing up the "Baby Mama" stuff again [well, almost].
And it looks like the rank-and-file are taking the news..."well"? One comment on Glassdoor from someone claiming to be a current reader at the firm tells prospective hires that a Pro of working at Tower is "The opportunity to work with extremely talented people" but does seem to caution a rather useful piece of critical info: "I wouldn't say it's a con, but there are some management changes taking place."
Interesting that one wouldn't say that on an internet message board...
But there is one part of Gorton's email that some Tower insiders tell us is a bit irksome when it comes to the whole "While we're being honest" vibe:
I am not retiring or going away from Tower. I will ensure that Tower continues to run with the values that I have always promoted and maintains the compacts with trading teams and employees that they have come to expect. I don’t expect any radical changes in firm direction.
According to two Tower insiders, when it comes to the whole part about keeping things the same, the "radical" in "radical changes" is doing a lot of work.
Per our info, Tower has recently laid off about 50 engineers, which makes sense when you read into what Gorton said in his email, but less sense when we remember that Gorton is a software guy who founded the firm to be on the bleeding edge of high-frequency trading, so it would be a pretty big change for Tower to scale back on engineering power while leaving its trading and research desks almost entirely intact.
We reached out to Tower about the layoffs and the new structure, but the firm's Global Head of Communications informed us that she is also no longer with the firm. Our other attempts to contact Tower have not been successful.