Another yarn of early banking years
In 1988, when the position of head of Investor Relations at Manufacturers Hanover fell my way because no one else wanted it, I decided to call on the securities analysts covering the company at their offices. At the time, that was not protocol, basically unheard of, but waiting around for analysts to visit me at my beleagured firm seemed silly. Calling them directly, setting up appointments without the aid of a secretary, was also odd. It put me on the map quickly and got me out of the building. My previous job in the so-called Strategic Planning Department had been excruciatingly boring.
One of the first calls was on the bank analyst at Goldman Sachs(called Bob here). Like almost everyone he was negative on the stock, but like most firms he had a neutral rating in print, as the investment bankers may have a deal in the works. When he spoke to investors, he was not positive about the company. It was clear that he was somewhat offended that I was calling on him at his office. The long maned and somewhat flamboyant analyst had a PhD. in electrical engineering, but math whizzes gravitated to the money that could be made on Wall Street. Ushered into his office by a secretary, we shook hands and he immediately went into a rant about a prior investor relation's head at MHT who had been removed from that position, replaced on a interim basis by a bond analyst, and then there I was. When meeting with analysts part of my pitch was that I would arrange meetings with members of management that they wanted to see. This was unprecedented at MHT, and at most firms.
My "successful" predecessor that Bob liked was a New York blue blood type, a Vietnam officer and helicopter pilot, and a big spender on food and drink for analysts that he entertained, (for ease of writing he will be called Clay). Clay's expense budget was huge and he was viewed by management as an excellent contact to the "arrogant" analyst community. His view that was he was irreplaceable as no one in management understood what drove the stock price. The Chairman named a new head of the Strategic Planning Department, a stubborn New York Irishman(called Kevin here) but also a Vietnam veteran who had been on the ground during the Tet offensive, a Captain in the quartermaster corps at a dangerous time for everyone there.
Still following this. Not sure. I will continue.
Kevin, as head of Strategic Planning, had Investor Relations reporting to him. In his first meeting with my predecessor he was asked to explain what he did and how he approached Investor Relations. Kevin asked about the expense budget as well, with fine restaurants almost nightly on the bank's tab. Clay said to him, "people of your ilk would not understand this". Kevin promptly went to the Chairman and said he would not do the job if Clay was in Investor Relations. Done, so much more to this but that is the backdrop to what follows. It was my job, Clay was put in another position where work was required. That was not for peoply of his "ilk", so he retired to his family home in the Westhampton on Long Island, saying that he was managing money.
The Goldman analyst followed up by asking to meet with the head of the International Division of the bank(Doug), who was a year or two younger than me but whose father had been President of Bankers Trust Company. He was highly regarded as a possible CEO someday, and intimidated other bankers senior to me. A Brit who was much more experienced than me, and senior to me, could hardly speak without his voice quivering when asked a challenging question by Doug. He stumbled and I explained as a follow up. That was not a bright move by me, to correct one my managers in front of someone senior, just an honest but rather stupid mistake. It made an impression on the younger Doug, as he became a bit intimidated by me, even as he was making a zillion dollars more and headed for the stars, his expectation, not to be fulfilled.
So Bob the Goldman analyst asked for a meeting with Doug, the Executive VP head of international banking. That was arranged and the meeting was held, Doug and Bob acting like they barely knew each other. It all seemed fine to me, with Bob asking mostly softball questions and Doug explaining the opportunities for business that were attractive in his sphere of influence. Usual fatuous talk about how MHT was better positioned than its competitors in many areas of the world.
The next day I received a call, picked up by my secretary, and after some chit chat which she did with anyone who called, she told me that it was Doug on the line, "important call" she said. Doug then began to ask me about the meeting with Bob and what I thought about it. "Wasn't he a bit arrogant?" and "Did he understand anything I said?" and "Where did he come from?" and "What did you think about him?". I gave straight answers but did faintly hear some other voices in the background, not relating to that at all. In answering Doug's questions I explained that, yeah, Bob comes across as a bit arrogant but he really understands banking and is a capable analyst. At the same time I realized that there was a speakerphone on, and others were there.
They were all together, Doug, Bob, and Tony, and were baiting me, to try show how uninformed this new Investor Relations head was. I asked, are there others with you? Laughter followed, and Doug said he was with a few friends. He quickly finished the call, saying "thanks". Only later did I learn who was on the call, and Bob eventually became a regular on the phone with me, treating me as if I was human.
Those creeps. Doug was fired from MHT the next year(for general incompetence and lack of loyalty, my guess), Tony stayed a Hampton's playboy of sorts, and Bob was named the 2nd best analyst for large banks in Institutional Investor magazine. He became a huge supporter of my efforts, but not of my company, until much later.
We eventually became friends when serendipity put Bob and his wife at the same hotel on a vacation trip to Lisbon in 1998. Kathy and I were invited later that year to a gathering at his house in the Hamptons, you guessed it, usual suspects.
This must end.
One of the first calls was on the bank analyst at Goldman Sachs(called Bob here). Like almost everyone he was negative on the stock, but like most firms he had a neutral rating in print, as the investment bankers may have a deal in the works. When he spoke to investors, he was not positive about the company. It was clear that he was somewhat offended that I was calling on him at his office. The long maned and somewhat flamboyant analyst had a PhD. in electrical engineering, but math whizzes gravitated to the money that could be made on Wall Street. Ushered into his office by a secretary, we shook hands and he immediately went into a rant about a prior investor relation's head at MHT who had been removed from that position, replaced on a interim basis by a bond analyst, and then there I was. When meeting with analysts part of my pitch was that I would arrange meetings with members of management that they wanted to see. This was unprecedented at MHT, and at most firms.
My "successful" predecessor that Bob liked was a New York blue blood type, a Vietnam officer and helicopter pilot, and a big spender on food and drink for analysts that he entertained, (for ease of writing he will be called Clay). Clay's expense budget was huge and he was viewed by management as an excellent contact to the "arrogant" analyst community. His view that was he was irreplaceable as no one in management understood what drove the stock price. The Chairman named a new head of the Strategic Planning Department, a stubborn New York Irishman(called Kevin here) but also a Vietnam veteran who had been on the ground during the Tet offensive, a Captain in the quartermaster corps at a dangerous time for everyone there.
Still following this. Not sure. I will continue.
Kevin, as head of Strategic Planning, had Investor Relations reporting to him. In his first meeting with my predecessor he was asked to explain what he did and how he approached Investor Relations. Kevin asked about the expense budget as well, with fine restaurants almost nightly on the bank's tab. Clay said to him, "people of your ilk would not understand this". Kevin promptly went to the Chairman and said he would not do the job if Clay was in Investor Relations. Done, so much more to this but that is the backdrop to what follows. It was my job, Clay was put in another position where work was required. That was not for peoply of his "ilk", so he retired to his family home in the Westhampton on Long Island, saying that he was managing money.
The Goldman analyst followed up by asking to meet with the head of the International Division of the bank(Doug), who was a year or two younger than me but whose father had been President of Bankers Trust Company. He was highly regarded as a possible CEO someday, and intimidated other bankers senior to me. A Brit who was much more experienced than me, and senior to me, could hardly speak without his voice quivering when asked a challenging question by Doug. He stumbled and I explained as a follow up. That was not a bright move by me, to correct one my managers in front of someone senior, just an honest but rather stupid mistake. It made an impression on the younger Doug, as he became a bit intimidated by me, even as he was making a zillion dollars more and headed for the stars, his expectation, not to be fulfilled.
So Bob the Goldman analyst asked for a meeting with Doug, the Executive VP head of international banking. That was arranged and the meeting was held, Doug and Bob acting like they barely knew each other. It all seemed fine to me, with Bob asking mostly softball questions and Doug explaining the opportunities for business that were attractive in his sphere of influence. Usual fatuous talk about how MHT was better positioned than its competitors in many areas of the world.
The next day I received a call, picked up by my secretary, and after some chit chat which she did with anyone who called, she told me that it was Doug on the line, "important call" she said. Doug then began to ask me about the meeting with Bob and what I thought about it. "Wasn't he a bit arrogant?" and "Did he understand anything I said?" and "Where did he come from?" and "What did you think about him?". I gave straight answers but did faintly hear some other voices in the background, not relating to that at all. In answering Doug's questions I explained that, yeah, Bob comes across as a bit arrogant but he really understands banking and is a capable analyst. At the same time I realized that there was a speakerphone on, and others were there.
They were all together, Doug, Bob, and Tony, and were baiting me, to try show how uninformed this new Investor Relations head was. I asked, are there others with you? Laughter followed, and Doug said he was with a few friends. He quickly finished the call, saying "thanks". Only later did I learn who was on the call, and Bob eventually became a regular on the phone with me, treating me as if I was human.
Those creeps. Doug was fired from MHT the next year(for general incompetence and lack of loyalty, my guess), Tony stayed a Hampton's playboy of sorts, and Bob was named the 2nd best analyst for large banks in Institutional Investor magazine. He became a huge supporter of my efforts, but not of my company, until much later.
We eventually became friends when serendipity put Bob and his wife at the same hotel on a vacation trip to Lisbon in 1998. Kathy and I were invited later that year to a gathering at his house in the Hamptons, you guessed it, usual suspects.
This must end.
posted by John Borden at 12:11 PM
0 Comments:
Post a Comment
<< Home