FOR ALL of Wall Street's unexpected twists during the past year, the markets' upheaval did produce at least one predictable effect: a string of abrupt divorces between high-ranking executives and the firms they helped lead.
Many top bankers and traders have seen their careers stall amid mounting losses and accusations of managerial failure. The casualty list includes Merrill Lynch's Stanley O'Neal, Bear Stearns's Warren Spector, Zoe Cruz of Morgan Stanley, and Citigroup's Tom Maheras.
Wall Street exiles should take heart, however. Compared with managers in other industries, their chances of landing on their feet, either at another bank or with a venture of their own design, are high. Moreover, a look at today's financial incumbents suggests that some of the recently departed may achieve even greater heights during the next phase of their career.
Fired a decade ago from his perch as president of Citigroup, Jamie Dimon today sits atop New York's financial services industry as chief executive of JP Morgan Chase. In avoiding many of the setbacks of the credit crisis, Dimon's bank vaulted past Citigroup in market capitalisation, and this month won the downturn's biggest prize, the hobbled Bear Stearns, with an all-share offer valuing Bear at $1.2 billion (€758 million).
Frank Quattrone, the technology-sector banker derailed by obstruction of justice charges in 2004, has announced plans to open his own advisory firm. His overturned conviction paved the way for the former Credit Suisse star's return to an industry dotted with notable comebacks.
Sandy Weill, retired Citigroup chairman, Pete Peterson, Blackstone Group co-founder, and John Mack, two-time Morgan Stanley chieftain, also suffered defeat at the hands of colleagues during bitter power struggles earlier in their careers.
Michael Bloomberg, New York's mayor, and Jon Corzine, New Jersey governor, won the support of millions of voters in their quests for political office. Years earlier, each had lost the confidence of their partners at Salomon Brothers and Goldman Sachs respectively.
Executives in any industry can set a derailed career back on track. But vindication appears to come sooner and more easily in financial services. "The financial sector is transaction-driven," says Andrew Ward, an assistant professor of business at the University of Georgia and co-author of Firing Back: How Great Leaders Rebound After Career Disasters. "Some deals work out well, some don't work out well. Failure is accepted."
Wall Street's volatile nature often helps strengthen the deposed executive's case that they were not alone in making the mistakes that led to their departure. "It's a lot easier to find the sunlight in the careers of financial players than it is for a guy who's working his way up the food or razor-blade industry," says Jim Drury, an executive recruiter who has sought candidates for companies such as United Airlines, Sara Lee and Quaker Oats. "Decisions don't happen as quickly, and the movements are slower in the broader industrial sectors. In financial services, reputations can be made or lost overnight, and then made again."
There is a relatively small pool of people with the experience and skills to run complex securities and banking businesses. Take Citigroup: its search for the ideal successor to chief executive Charles Prince, who resigned under pressure in November, proved fruitless. The bank eventually tapped Vikram Pandit, an investment banker who had joined Citi just five months earlier.
Most Wall Street executives retain their fame - and vast web of contacts - long after they have lost their jobs. For those looking to open a hedge fund, private equity firm or advisory boutique, the barriers to entry and capital investment are lower than those required for an industrial concern of equivalent size.
Nevertheless, those who seek another opportunity to run a publicly traded company may struggle to persuade board members to overlook the end to their previous job. Some reasons, such as disagreements over company strategy, are easy to forgive, says Drury. Others, such as a history of making poor or ethically questionable decisions, are impossible to ignore.
