Tuesday, April 11, 2017

The travails of Barclay's CEO Staley were not unexpected

Today both the New York Times Business section and the front page of the B section of the Wall Street Journal had articles on the embattled CEO of Barclays Bank James Staley.  This is a long look back.

Shortly after the merger of J.P. Morgan and Chase Manhattan in the year 2000, Jes Staley was named head of the asset management division of the new JPMorgan Chase.  At J.P. Morgan he had most recently been in charge of the Private Bank.  In my capacity as head of Investor Relations for the combined firm, he was one of the bank's business leaders that needed attention.

At a securities analyst meeting in 2001, Jes had the first impact on my responsibilities.  He rose to answer a question that was asked by an investor, and gave a lengthy rambling answer that was more self promotion than a corporate statement.  After the meeting, I approached a Vice Chairman who was one of my two bosses and questioned Staley's approach.  As was Marc's style, he just looked skyward for a moment, then nodded and said nothing, which was his way of saying he understood what I was saying but that he would not comment or stray from the corporate line.  In his mind it was part of what must be accepted after CEO Bill Harrison's massively dilutive acquisition of J.P. Morgan, and not worth discussing.

Given Staley's stature in the organization it was my job to introduce him to analysts or investors if they expressed an interest and if they were important enough to spend time with.  With some members of management with higher profiles, my job was to recruit significant investors to come in, but with Staley I was hesitant.  It became clear that my concern was justified when I began introducing Staley to investors.  Jes could not tolerate anyone questioning anything he said.  Normal one on one meetings with market participants were usually a back and forth, with it being understood that there would be areas of questioning in which no complete agreement was possible, nor should there have been.  Staley did not understand that.  If someone questioned his strategy or his view of the business, Staley would incessantly try to convince the guest that he, the business manager, was right. It was difficult to conclude a meeting and get out of his office unless the visiting investor would more or less concede that he understood in a way that would at least partially imply that he agreed. More than once I apologized to an analyst for the tone of a meeting.

Since that time I have marveled at the career trajectory of Staley.  There must have been talent that I did not see.  He was well connected and extremely ambitious, but it was hard to understand from afar how he had managed to impress and work so well with Jamie Dimon.  Eventually, that's a long eventually, he apparently did not as he left JPM in 2013 a "management reshuffle".  Today I read in the Wall Street Journal that he then "joined BlueMountain Capital, a hedge fund that had profited a year earlier from the widely reported 'London whale' debacle that left J.P. Morgan with more than $6 billion in losses."  To some that was a completely weird outcome. Staley went from there to Barclays in 2015.

In his career success, had Staley changed from what was remembered?  Based on events now, apparently not.  His inappropriate efforts to unmask whistleblowers at Barclays demonstrates a variation of the mindset of his that was completely familiar.years ago.  It's amazing that he has reached the level he is at and ultimately unlikely that he can succeed there.    


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