The poet TS Eliot might have laid a claim to being the patron saint of banking investor relations and press officers, when he said “human kind cannot bear too much reality”. This is particularly the case when it comes to personnel announcements. For example, when two long-term rivals get appointed co-heads of a business, there will be all sorts of complex emotions at work; much better to say that they’re both “thrilled and excited” than to get into the details of what either one really thinks.
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White lies like this are the common stuff of the industry; we can all think of people who “retired to pursue interests outside banking”, then showed up at a rival firm six months later. And nobody really benefits from hearing that an internal candidate passed over in favour of a high-priced new hire was “bitterly disappointed, but willing to suck it up for the time being”.
But there is a bright line that’s best not crossed. As Jezz Farr, the former head of global communications for banking and markets at HSBC and ex-head of international press at Deutsche Bank, points out, you really can’t be telling the market that a senior banker left of their own accord if they were actually fired. Not only will everyone find out eventually, but when they do, the credibility damage will be permanent. And (as everyone working in the profession knows) fairly or unfairly, a reputation for bending the truth is something which attaches to the individual, not to the institution that they are working for.
Which means that if you’re planning on having a long career in the communications industry (like Jezz Farr has done), it’s important to stand up to any attempts to make you compromise yourself. In the case of one particular guy who got fired and who wanted Jezz to pretend otherwise, this turned out to be pretty easy – although the departing banker tried to put the pressure on, the Head of Risk just said “it’s not true [that he left by choice], so don’t say it”.
Farr also notes that the lies which often get people into trouble come in the form of denials. Particularly, panicky denials made by people who aren’t in possession of the full facts, but who want unpleasant attention to go away. He says that “a ‘no comment’ won’t necessarily prevent a story, but it does prevent a lie” and that “a measure of a good organization is how it reacts to something unexpected and negative”. The advantage of no-commenting is that it buys an organization a little time to come up with something sensible and considered to say, and ideally to show that “even when things go wrong, they are capable of doing the right thing”.
These points have relevance that goes way beyond the comms profession. In many ways, honesty in internal communication about personnel issues is more important than external, if only because its audience will be paying more attention and will know more of the relevant background facts. It’s not always possible to be totally transparent about big changes in plans, layoffs or mergers, but bankers have very long memories when it comes to leaders who they consider to have lied to them.
Elsewhere, a favourite morale-boosting game for junior analysts to play, in the small hours of the morning, is to add up the hours they’re working, divide their salary by the total and discover that they would have been better off stacking shelves at WalMart. Now it seems that more senior ranks can join in the fun.
Under the latest stock reward and bonus plan, the top-performing store managers at WalMart can make $128,000 basic, bonuses of 200% of their salary and $20,000 of stock awards. That would take them just above $400k; that would put them in line with the average Director rank across the global financial services industry; probably somewhere more like Vice-President at a good US investment bank. There are even quite a few hedge fund jobs that pay less.
Of course, this isn’t just a matter of working in a shop; a really big WalMart is a multimillion dollar business, and the general manager is akin to its CEO. But it’s one of the few jobs (outside the Permian Shale) where people without a university degree can make banker money.
Meanwhile …
Although Nomura announced big redundancies yesterday, their actual results in the last quarter were pretty good – up 30% and the best in seven years. That might sound pretty harsh, but when you think about it, any bank which could have been in a position where any quarter in 2023 was setting records would have been likely to consider whether there was a problem with the underlying run rate. (Financial News)
A partner at Robey Warshaw has gone to a crypto firm. Less surprising than it sounds; it’s former Chancellor George Osborne and he’s joined an advisory board at Coinbase rather than giving up his banking job. (FT)
Whatever happens in the next UK election, it seems that the banker bonus cap won’t be brought back; the Labour party’s Rachel Reeves “wants to be a champion of a successful and thriving financial services industry” (BBC)
One of the stories that didn’t get so much coverage at Davos; BlackRock’s Phillipp Hildebrand got chased through the streets of town (looking down at his shoes to try not to slip) by a “Rebel TV” crew trying to ask him questions about fossil fuel investments. (Inside Paradeplatz)
Super-rich US bankers don’t seem to be learning the lesson from David Tepper that owning a sports team in Baltimore isn’t as much fun as expected; Carlyle Group’s David Rubinstein is about to close a deal on the Orioles (Business Insider)
Abhay Kumar Sinha has been hired from Deutsche Bank to be co-head of APAC credit trading at Barclays alongside James Roberts. (The Trade)
Perhaps predictions of an “ESG Winter” were too soon? As well as climate change, banks are looking at ways to monetize biodiversity (including “debt for nature swaps”), creating new roles for people like Gwen Yu at JP Morgan. (Bloomberg)
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