SALLIE L. KRAWCHECK, once one of a handful of high-powered women on Wall Street, rose to the top levels â€" only to find herself out of work.
It happened twice.
After running Sanford C. Bernstein & Company, she left for Citigroup in 2002. She led the brokerage division of the bank. She was promoted to chief financial officer.
Then her fortunes seemed to shift. In 2007, she was moved back to run the brokerage unit and another group, seen by some as a demotion.
In that role, she butted heads with other Citigroup senior managers over whether to compensate clients on a money-losing investment. The bank eventually did, but Ms. Krawcheck said her sometimes zealous “advocacy†cost her the job.
In the midst of the financial crisis in 2009, Ms. Krawcheck landed at the wealth management division at Bank of America, which had just acquired Merrill Lynch. Two years later she was let go again, as part of a broader corporate restructuring.
She was not the only senior woman on Wall Street to lose her job in recent years; two others near the pinnacle of the financial world were casualties of the financial meltdown. Zoe Cruz, the one-time co-president of Morgan Stanley, was ousted over a major trading blowup. The chief financial officer of Lehman Brothers, Erin Callan, lost her job just before the investment bank filed for bankruptcy. More recently, Ina Drew, a senior executive at JPMorgan Chase, handed in her resignation after the bank disclosed a multibilion-dollar trading loss last year.
The uncertain fortunes of women at the top of Wall Street may look like those of their male counterparts: victims of boardroom struggles, market tempests, their own mistakes, at times simple scapegoats.
But as the dust of the financial crisis settles, one thing seems certain to Ms. Krawcheck. The recent tumult, she believes, has been a major setback to the presence of women on Wall Street as male chief executives turned to longtime allies, typically other men, to fill their executive suite.
“Think about it. You’re going through this horrible downturn. You’re a C.E.O. You want people who you worked with for 10 years or 20 years who you can trust,†said Ms. Krawcheck in an interview. “These moves have led to more homogeneous leadership teams.â€
With the financial crisis fading from view, Ms. Krawcheck reflected on her tenure on Wall Street, as well as her new role in Washington and on the Web. Ms. Krawcheck, a married mother of two children, discussed her experience with discrimination, the importance of having a sponsor and why she’s so active on social media.
The following is an edited excerpt from the interview.
What grade would you give Wall Street on the treatment and promotion of women
A declining letter grade.
Why
The facts would show that it’s gone backward. If you start to list off senior women on Wall Street, there are fewer today than there were even a few years ago. It’s a shame. We can debate the fairness issue of how many people of different backgrounds should be in a room. But I would actually just discuss the business issue. Research has shown that more diverse teams lead to better returns and lower volatility, meaning women tend to be more client-focused, tend to be more long-term focused, tend to be more risk-averse. When different backgrounds are brought together, you strengthen a management team.
Why do women have trouble getting and hanging onto senior positions on Wall Street
I have never seen a decision made where someone said, “She’s a woman, let’s not give her a job†or “He’s a Hispanic, let’s not give him that job.†That said, we all tend to be more comfortable with people like ourselves. And we tend to put in place review systems and promotion systems that are based on the leadership team that’s already in place. We want to bet on the known as opposed to the unknown.
What is the worst discrimination you have witnessed on Wall Street
There was a project at one of the companies I worked at. One person was not offered a role on the team because she was a young mother, and they didn’t think she wanted to be away from her child. It was completely unfair.
Did they ask her if she could handle the job
No. That was the issue in my opinion. She should have had the opportunity to have that discussion. By the way, I’d also love to see her say, “I can’t raise my hand,†and no one would hold that against her.
What were some of the hardest issues you faced
A Wall Street firm rescinded an offer they had given me because they found out I had a baby at home. Yes, that really happened. So the first work-life challenge was having the “work†part of it at all.
Then it became an issue of finding the right rhythm. Days after my daughter was born, my director of research called. After asking about our health, he began to walk through his thoughts on my latest research project â€" and gave me substantial additional work to do, with a pretty short timeline. I made my husband destroy the pictures he took of me holding my infant daughter while making the changes at the computer. I learned how to set limits pretty quickly.
Why did you leave Citigroup
During the downturn, we sold certain investments to clients that we honestly believed were low risk. We had a market downturn, and the clients lost a lot of money. I took the position that we should share those losses with our clients, and there was a difference of opinion within Citi on that. The discussions went all the way up to the board level, and Citi made the determination to partially reimburse the clients. In my advocacy of that position, it appeared that I really stepped across the line in terms of keeping my job. I’d say I won that client war, but it cost me my job.
You started out on Wall Street as a banker but made your name as a research analyst at Sanford Bernstein. Is stock research a good entry point for women
The reason, in hindsight, that worked so well was because nobody particularly cared if their research analyst was male, female, black, white, yellow, green or blue. What they wanted were insights on their stocks. While you had to work tremendously hard to be successful, it actually tended to be a flexible job. I never had a client tell me that the research report I handed them was unacceptable because it had been written on a Saturday night at my kitchen table rather than a Thursday afternoon at 3 p.m. I had a baby at the time, so there was some flex in the job.
You’ve spent years in wealth management. Are women well served by financial advisers on Wall Street
I think the business can do and should do a much better job with females, both in terms of having more females as financial advisers as well as in serving females as clients. One of the most interesting bits of research we did there was around how advisers interacted with their female clients. If an adviser had a couple as a client, you would watch them interact with the couple. What became obvious is they were talking to the man about 90 percent of the time and then nodding to the woman. Therefore, it was no surprise that when he dies â€" and he typically dies first â€" she stays with her adviser less than half the time.
What advice do you have for women on Wall Street
Sylvia Hewlett at the Center for Talent Innovation has been doing some very interesting work on the importance of sponsorship. For years, we’ve talked about mentors. Responsibilities are different for mentors. A mentor is someone you go to, you have a cup of coffee, you give them advice, you shoot the breeze for a while and away you go.
A sponsor is someone who pulls people along. Very successful people have sponsors. In fact with Sheryl Sandberg, if you look at her, her sponsor was Larry Summers. So there were powerful people in her career, and in my career, who proactively supported and pulled us along.
Who was your sponsor
When I was at Bernstein it was Chuck Cahn, who ran the business and who gave me my first big promotion when I was six months pregnant with my daughter. I actually remember sitting there and thinking, “Does he see this big belly in front of me†There was a period of time when Sandy Weill was as well.
What was the best advice Mr. Weill, your boss at Citigroup, gave you in terms of being a woman on Wall Street
Well, Sandy gave me no advice in terms of being a woman on Wall Street actually, like zero advice. Sandy’s genius was that Sandy would talk to anybody and everybody about anything and everything at any time.
I have a memory of getting into a car with Sandy and everybody pulls out their BlackBerrys. Sandy started talking up a storm with the driver. How’s business What are you seeing What kind of conventions are down here Are there more Are there less
He would do that everywhere. His genius was that he’d be walking down the hall, and he would come over and he’d say, “Hey, I just talked to a financial adviser in Des Moines who’s telling me X, Y, Z about the business.†It would be some minute detail of the money-fund pricing vs. bank deposits in a certain segment of the country.
What you’ve seen in contrast is there are certain C.E.O.’s who surround themselves with their people. To get to them you’ve got to get through their people, and the richness of the inputs therefore becomes much less.
Since leaving Wall Street, you have been spending a lot of time in Washington. You were vetted as a candidate to run the Securities and Exchange Commission, and your name has surfaced for other posts. What are you trying to accomplish
I think of it as a public service for those of us who have the background and the experience to engage in that discussion. So I’ve spent time visiting with some of our elected officials and regulators with an offer to help if they’re looking for help with facts. I can engage in this conversation when I’m not working for a large bank.
You have a big presence on social media. Why have you developed an online brand
I’ve been exploring social media as an alternative to the op-ed or other means of communication. We’re in the midst of a very important national discussion on a variety of topics, one of which is bank regulation. Given my background and all the lessons that I’ve learned â€" many of them the hard way â€" it’s important for me to be a contributor to the discussion.
