Abuse of power: The Federal Housing Finance Agency’s inspector general has accused former Director Mel Watt of two counts of misconduct, after concluding that he attempted to “coerce” a female employee into having a romantic relationship with him. “We find that there are no circumstances under which it would be appropriate for the head of FHFA to induce a subordinate female employee to meet with him alone, in his apartment, for a conversation in which he professes his attraction for that employee and holds out opportunities for the employee to serve in specific executive positions over which he exercises total control,” said the IG’s report, which the Washington Post obtained through a Freedom of Information Act request. The report also said Watt’s explanations for the comments he made to staffer Simone Grimes — some of which were recorded — were “not credible.” Watt called the IG’s conclusion that he had misused his position “sexist,” because it assumed that a man could not mentor a woman without seeking an inappropriate relationship. Though President Trump and the U.S. Office of Special Counsel received the report in November, no action was taken before Watt’s term at the FHFA, the regulator for Fannie Mae and Freddie Mac, ended last month. The accusations against Watt first came to light this past summer, as we reported here.
FHFA’s Mel Watt
Will other banks follow Citi’s lead?: Arjuna Capital is filing shareholder proposals with 11 financial services and tech companies seeking their median gender pay gaps. The median figure — unlike the more widely disclosed adjusted gender pay gap — reveals the degree to which men are concentrated in higher-paying roles. Activists say this figure will help tell the whole story and give companies another way to track their progress toward equity. “What gets disclosed, gets managed,” said Natasha Lamb, a managing partner at Arjuna, who argued her case in more detail in this op-ed. Lamb cited a study that found that gender pay gaps shrink in countries where companies are required to report them. Arjuna succeeded in getting Citigroup to volunteer its median just recently, as we noted here. Now it is asking American Express, Bank of America, Bank of New York Mellon, JPMorgan Chase, Mastercard and Wells Fargo to do the same, along with Adobe, Amazon, Facebook, Google and Intel. But already three of those companies have asked the Securities and Exchange Commission to rule out the proposal.
You have been warned: Proxy advisers are pressuring community banks and other small and midsize enterprises to increase gender diversity on their boards. This spring Glass Lewis Co. plans to urge investors to vote against re-electing directors who chair nominating committees at companies in the Russell 3000 Index with all-male boards. There were 509 such companies at the end of the year, down from 708 companies at the end of 2014, Glass Lewis said. “Companies that don’t have women on their boards are outliers,” said Courteney Keatinge, senior director of environmental, social and governance research at Glass Lewis. “And we want to make sure those outliers are called out.” Mid Penn Bancorp in Millersburg, Pa., is one of the Russell 3000 companies that will avoid the criticism, having added its first female director in several decades last month.
Intellectual property dispute: State Street Corp. is suing the sculptor it commissioned to create the famous “Fearless Girl” statue. The company says Delaware artist Kristen Visbal is violating her contract by making and selling replicas of the statue. The suit, filed in state court in New York City on Valentine’s Day, also claims the unauthorized sales are “weakening and adulterating the Fearless Girl message.” The statue, now placed outside the New York Stock Exchange, was part of a State Street proxy campaign to push companies to include at least one woman on their boards of directors. But it became a cultural phenomenon in its own right.
More to the story: Banco Santander’s last-minute decision to withdraw its offer to hire Andrea Orcel to be its next chief executive officer was about more than just money. The Spanish banking giant has said that it didn’t want to pay Orcel $50 million in deferred salary he had coming to him from UBS, his former employer. But other red flags also popped up related to “the star banker’s public profile,” according to the Financial Times. Santander had asked Orcel, a regular at the World Economic Forum in Davos, not to attend this year, at least in part because of worries he would upstage Executive Chairman Ana Botín. The way that Orcel acted during the dispute over his pay and Davos “fueled concerns that his ambition would make it difficult for him to serve as Ms. Botín’s de facto number two,” the FT reported.
Do better: An Axios study found that 9.7% of decision-makers at U.S. venture capital firms are women (or 105 out of 1,088 people). That’s up from 8.9% in a similar analysis last year, 7% in 2017 and 5.7% in 2016. The study looks at firms that raised at least one fund of $100 million over the past five years, with the sample size this year being 284 firms. “Firms are clearly concerned about the optics,” Axios wrote, noting that more of them are obfuscating job titles on their websites. Some position junior women, including executive assistants, above the male general partners on their team pages. Big names like Andreessen Horowitz, Benchmark, Redpoint Ventures and Union Square Ventures also added their first-ever female general partners over the past year.
Where the women are: Women are fueling the growth of one of the most popular products on Wall Street, the $700 billion market for collateralized loan obligations. Only one out of every 10 senior management jobs in the investment industry is held by a woman, but in the CLO niche, one out of every four bosses is a woman, research by The Wall Street Journal shows. Female executives head 13 of the world’s 50 largest CLO teams by assets under management, including Carlyle Group’s $26 billion (Linda Pace), Octagon Credit Investors’ $16 billion (co-managed by Lauren Basmadjian), and CVC Credit Partners’ $14 billion (Gretchen Bergstresser). Female-led CLO managers also have performed better, on average, than their male counterparts since 2013, according to data from Citigroup. Angie Long, Palmer Square Capital Management’s chief investment officer, recalled going to a meeting at Citi in 2013 with a female colleague. “And then three senior women bankers from Citi walked in,” Long said. “There wasn’t one guy in the room, and we all realized it and started laughing.”
Sell one bank, start another: The former CEO of WashingtonFirst Bankshares, Shaza Andersen, is leading a group that intends to open a new bank in Northern Virginia to serve small and midsize businesses. Organizers plan to raise $35 million to $50 million in capital for Trustar Bank, which could open in Fairfax County as early as June if regulators approve. The $2.1 billion-asset WashingtonFirst, founded by Andersen in 2004, sold to Sandy Spring Bancorp in Olney, Md., last year. After several other community banks in the area were sold, Andersen decided to start over again. “It just felt like it was the right time to get back into it while the market is in need of community banks,” she said. Anderson has been among our Women to Watch several times over the years.
No deal: His and hers discounts offered to HSBC’s Hong Kong staff for Valentine’s Day sparked more anger than affection. The controversial “Staff Offer” listed items like a laptop computer and GoPro camera in a section labelled “for him,” and five different vacuum cleaners and a blender in a section labelled “for her.” HSBC said an external company created the promotion.
First Republic Bank in San Francisco has appointed its president, Gaye Erkan, to its board of directors, a move that it called “an important next step” in its succession plan. The 39-year-old Erkan now appears to be the leading candidate to replace James Herbert when he retires as CEO — and, if she does succeed him, she would be one of just a few women running a top 40 U.S. bank. The $99 billion-asset First Republic, which focuses on private banking and wealth management, said Herbert, 73, would remain CEO until at least Dec. 31, 2021, and serve as executive chairman until the end of 2028. Erkan joined the bank in 2014 and has been president since 2017.
Mastercard’s chief financial officer, Martina Hund-Mejean, is retiring, effective April 1. She will be succeeded by Sachin Mehra, the credit card company’s chief financial operations officer. Hund-Mejean, 58, had been in the CFO role for more than a decade and the announcement about her departure was unexpected. She is highly regarded by investors and analysts, who appreciate the three-year guidance she introduced in 2010. “She was one of the only CFOs that provided three-year visibility,” said James Friedman, an analyst at Susquehanna Financial Group.
An executive from Walt Disney Co. has joined San Francisco’s Union Bank as head of business data and insights. Una Fox is expected to help the bank personalize the customer experience using artificial intelligence and machine learning. Fox had been vice president of digital marketing and data technology at Walt Disney, where she led the creation of a digital and analytics system to support its international brand and marketing teams. Before that, she managed business and technology teams at Yahoo. Fox will report to Pierre Habis, the head of consumer banking for Union, which is part of the Japanese banking giant Mitsubishi UFJ Financial Group. Habis also oversees another recent recruit from the entertainment industry; Union hired Julie Demarigny from Warner Bros. Digital to be its head of digital banking in September.
Kristi Mitchem — “one of the relatively small number of women running global asset management companies,” according to the Financial Times — has left Wells Fargo Asset Management to become CEO of Bank of Montreal’s investment arm, BMO Global Asset Management. She will start March 18 and report to Joanna Rotenberg, head of BMO Wealth Management. Mitchem succe Richard Wilson, who is retiring in June. Mitchem had been CEO at the Wells Fargo unit for less than three years, and it struggled during that time to attract business and add to its $466 billion in assets under management in the wake of the 2016 phony-accounts scandal at the retail bank, the FT said. The unit she’ll oversee at BMO has C$320 billion, or $240 billion, in assets under management. Before joining Wells in 2016, Mitchem was head of State Street Global Advisors’ institutional client group for the Americas. She also previously worked at BlackRock and Goldman Sachs.
Wells Fargo has announced that Julie Scammahorn will become its chief auditor in April. She most recently worked as the chief auditor for Citigroup’s U.S. banking unit. At Wells, she will take over for acting chief auditor Kimberly Bordner, who is expected to return to her previous role as executive audit director. Bordner had been filling in since David Julian was placed on administrative leave, following a notice that regulators planned to pursue sanctions against him in connection with the phony-accounts scandal. Scammahorn will be part of the operating committee and report directly to CEO Tim Sloan.
Cathy Nash, who became CEO of Woodforest National Bank in The Woodlands, Texas, in April 2015, quietly resigned in December. James “Jay” Dreibelbis, who had been the $5.8 billion-asset bank’s president and chief operating officer, succeeded her. Nash was responsible for turning Woodforest into a commercial lender and moving it away from a heavy reliance on overdraft fees. She also was one of American Banker’s Community Bankers of the Year in 2012 when she was CEO of Citizens Republic Bancorp.
Samantha Greenberg, founder of the hedge fund Margate Capital, is closing it down just three years in to join Ashler Capital. She is expected to start in March as a portfolio manager at Ashler, a unit of Ken Griffin’s $28 billion-asset hedge fund Citadel. Greenberg specializes in investing in the technology, internet and consumer sectors.
South Africa’s third largest bank is losing its female CEO. Maria Ramos will retire as CEO of Absa after she turns 60 at the end of February. Ramos, who had been in the role for a decade, recently oversaw the separation of the bank from its U.K. parent Barclays. René van Wyk, an Absa board member and former South African Reserve Bank official, will serve as interim CEO until a replacement is found. Ramos is a former anti-apartheid activist who worked in the government during Nelson Mandela’s presidency, and given that she is a vocal supporter of the current president, Cyril Ramaphosa, some speculate she could end up returning to a government job.
Meanwhile, one of Sweden’s biggest banks is getting its first female CEO. Handelsbanken has tapped Carina Akerstrom to replace a retiring Anders Bouvin, effective March 27. Akerstrom has been deputy group CEO at the bank since 2016. Research suggests the chances of a woman being appointed as CEO increase when a company is in trouble, and Handelsbanken is a case in point. Bouvin has been under pressure over issues such as rising costs and credit losses in the bank’s British arm.
Anne Finucane, Bank of America’s vice chair and one of our Most Powerful Women in Banking, talks about the costly European restructuring the company is doing ahead of Brexit and its plans to replace some staff with artificial intelligence, in this Financial Times podcast. (Read our Finucane profile here.)
Bank of America’s Anne Finucane
Here we go: Reluctance to support female candidates for public office is apparent in how voters describe the men and women seeking election. And the impact of these stereotypes is about to play out in uncharted territory: a presidential race featuring six women running for the Democratic nomination, all vying to compete against President Trump, who has a history of making sexist comments. Check out this New York Times analysis of sexism on the campaign trail, which delves into factors such as likability, perceptions of masculinity and femininity, and judgments about how attractive the candidates are. The dynamics will be interesting to watch, especially as Sen. Kirsten Gillibrand, D-NY, makes feminism a central theme of her presidential candidacy.
Better benefits in retail: Lululemon Athletica is now offering full-time employees three to six months of paid parental leave. The gender-neutral benefit awards three months of paid leave to full-timers who have been at the yogawear company for two years. Those with five or more years in qualify for six paid months off. At Lululemon, employees are considered full-time if they work 24 hours a week.
Coming this fall: Barbie is about to try some new occupations, including astrophysicist, polar marine biologist, wildlife photojournalist and entomologist. Mattel partnered with National Geographic to develop the new line of Barbie dolls, which will focus on fields such as science, exploration and research where women are underrepresented.