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Ms. Clean
Jan Alexander
01/01/2008
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On the other hand, the move from CFO back to wealth management
was a lateral one, amid speculation that Krawcheck lacked the experience to run
the finances of a $2.2 trillion institution lumbering under the weight of
Weill’s legacy of acquisitions. There is a ready supply of blogs accusing
Krawcheck of letting her youth and good looks work in her favor, and noting that
both her previous and present husbands were her bosses earlier in her career.
She has been fairly vocal in public appearances about how her first marriage, to
John Binnie—whom she met while working in the investment banking side of Salomon
Brothers—fell apart over career stresses. She has been married since 1993 to
Gary Appel, who was a founding partner at Donaldson Lufkin Jenrette Merchant
Banking.
TOP VIEW
Sallie Krawcheck faces many challenges after taking
over last year as the head of wealth management for Citigroup. But in a bank
shaken by the subprime mortgage crisis and a new regime at the top, she is
running a profitable division with an eye on expanding its global reach. Along
the way, she must improve Citigroup’s private banking credibility in Japan after
the regulatory-abuse scandals of two years ago, and help the division’s clients
navigate the shoals of recession. With straight talk and a keen sense of humor,
this banking- industry wunderkind comes well armed for these and other tasks
ahead. |
"I’m very fortunate to be in a marriage now where my husband
and I both work very, very hard to balance the time out with the children," she
says. "Yesterday I was in Geneva; he was at our son’s track meet. I always tell
women that one of the most important career decisions you can make is choosing
the right husband. You could say the same thing to a man, by the way. It’s hard
to be effective in your job if you don’t have a good home life. And it’s hard to
have a good home life if you’re struggling with things in the job as well."
If Krawcheck can bring order to Citi Global Wealth Management,
someday she just might emerge as a strong contender for the top spot. That
contest would be something like the presidential race—just more political.
Krawcheck on Citigroup and the industry:
If you were an analyst now, what would you say about
Citigroup?
Citigroup has certainly taken a
hit of late, but one of the reasons I’m so happy to be here, and particularly to
be responsible for global wealth management, is that I think we’re well
positioned, better positioned for these trends than any other financial services
company out there. The investment from Abu Dhabi could be a real win-win for
both sides. To have a strong and sophisticated institutional investor make an
investment in Citigroup at this time, with the nervousness in the market, I
think is a real statement. As we look to globalize even more, a strong partner
like that in that part of the world can only be helpful.
If you see the growth and returns that financial services
companies have delivered over time, and if you were to close your eyes and not
know what industry they were in, given their long-term earnings and return
trends, you would say they traded at market multiples, if not in excess of
market multiples. What is not always apparent during "normal" quarters is that
these companies are risk-absorbing businesses—be it market risk, liquidity risk
or credit risk, all of which we saw the impact of in the third quarter.
When all three issues impact a company at one time, you can see
a significant downturn in earnings. Added to that is the fact that the drivers
of those earnings can be opaque to the outside world because the balance sheets
can turn over quickly, and there’s a good deal of leverage in them. And that’s
why these companies tend to trade at fairly low price/earnings ratios.
Risk-absorbing businesses are very profitable over time, but we’ve seen several
risks go wrong at one time.
Of course, I am no longer an analyst; I am overhead. But when I
was an analyst, I used to comment to investors that in periods of uncertainty
are the greatest opportunities.
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