John Mack, Ken Lewis... Who Will Fall Next?
The number of bank CEOs to survive in the rubble is shrinking.
Bank of America (BAC) CEO Ken Lewis, the Georgia State grad who hailed from small town Mississippi, finally earned his spot among the ego-driven Ivy League MBAs of Wall Street last year. He had tried and failed once before, when the Charlotte, North Carolina-based bank made a foray into investment banking only to retrench shortly after.
"I've had about all the fun I can stand in investment banking," Lewis famously proclaimed at the time.
During the frenzied days of September 2008, when Lehman Brothers collapsed and AIG (AIG) appeared on the brink, Bank of America was one of the only firms on solid enough footing to be considered a potential savior for troubled Wall Street. And save it did. Over the course of just a few hours on a Sunday that month, Lewis struck a deal with John Thain to buy Merrill Lynch.
At the time, Lewis was widely praised for his efforts. But it didn't take long for the mood to sour and for the regulators -- and New York attorney general Andrew Cuomo -- to come knocking. In the history books, it will be the Merrill Lynch acquisition that will be remembered for bringing Ken Lewis down. Yesterday, he announced his plan to resign at the end of this year.
"He is exhausted," his wife told the Wall Street Journal.
Lewis will officially join the club of fallen bank CEOs from the recent financial crisis. Former Merrill Lynch CEO John Thain, of course, was ousted by Lewis himself after the merger. Lehman Brothers' Dick Fuld fell with the firm, as did Bear Stearns' Jimmy Caynes. Remember Martin Sullivan? The former AIG CEO fell in June 2008 and he's already had three successors since. And last month, Morgan Stanley (MS) CEO John Mack joined the ranks as well when he announced plans to step aside as chief executive at the end of this year.
After a crisis, it always feels good to get new energy and a fresh start. In business, that almost always includes a change in leadership. So who's left?
- Jamie Dimon, JP Morgan (JPM). Perhaps no banking executive has been as celebrated during this crisis as Dimon. If he leaves JP Morgan, it will be viewed as damaging to the firm. But with the recent management reshuffling, speculation around his tenure there is intensifying -- specifically about whether or not he will ultimately land in the Obama administration. The banking sector is hopefully out of the woods, but it will only take a weak breeze to push it back in. So don't expect Dimon to go anywhere until JP Morgan and the rest of the industry has safely landed on the other side.
- Lloyd Blankfein, Goldman Sachs (GS). If history is any indication, of course, it would be Blankfein to head to Washington, as so many Goldman Sachs execs have in the past. The Goldman Sachs chief successfully led the firm through the credit crisis, perhaps, as some believe, because of those Washington connections. Although Goldman is firmly back on top of its game, Blankfein continues to fight a relentless public relations battle as many have targeted the firm's success as coming at the expense of so many others. Will he reach a breaking point as Lewis did? Don't count on it any time soon.
- Vikram Pandit, Citigroup (C). Pandit is like the guest at the party in the corner of the room, often alone, while the rest of the room talks about when he'll give up and leave. He's aware of the chatter, but he's determined to make the party the best time he's ever had, even though he'd secretly rather be home on the couch. Even the party's host -- Uncle Sam -- reportedly wants him out of the room, but he hasn't had the nerve to physically remove Pandit from the premises. And so he stays. He works hard on his image, doing whatever he can to win over the other guests. And maybe, if he sticks around long enough and the booze runs out, Pandit and the rest of the guests can all leave Uncle Sam's together.
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