It's still mostly a man's world on Wall Street
JP Morgan's decision to promote Marianne Lake to one of its top roles doesn't mean that hordes of high-flying women are about to shatter the so-called 'glass ceiling' anytime soon
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 21 November 2012
On the face of it, Marianne Lake's elevation to the top finance job at JP Morgan isn't simply a personal triumph for the 43-year-old finance head of the bank's consumer unit – it also marks another crack in Wall Street's rightly maligned glass ceiling that is blamed for holding back sharp financiers because of their sex.
But whether or not this sign of progress means anything for the industry where the higher ranks are still dominated by men and the gender pay gap remains wide is debateable.
Days before the announcement of Ms Lake's promotion another Wall Street giant, Goldman Sachs, cherry-picked a new class of partners and managing directors.
In the latter category, women accounted for 23 per cent of the new class, up from 19 the year before, according to figures compiled by Bloomberg. But the number was down from the 24 per cent promoted in 2010. Meanwhile, of the 70 inducted into the partnership, 14 per cent were female.
High up the food chain the picture is improving – even if the pace of change in the US lags behind some other countries with mandatory quotas. Of the new directors joining the board of an American financial services firm in 2011, some 24 per cent were female, against 18 per cent in 2010, according to a January study by the recruiter Spencer Stuart. But again, at Wall Street's top table, the uptick hides the fact that, in many cases, women remain woefully under-represented in decision-making phalanx.
At Goldman Sachs, the list of executive officers, headed by Lloyd Blankfein, features just one woman: Edith Cooper, the head of human resources (or, as they call it, human capital management). Morgan Stanley's chief financial officer, Ruth Porat, meanwhile, is the sole woman on its operating committee. Citigroup's top executive team also features just one woman. In all three cases, the boards appear more representative – but only just.
And what of JP Morgan? Ms Lake's elevation comes after a shake-up following the multi-billon dollar "London Whale" trading loss earlier this year, which, as it happens, led to the ousting of Ina Drew.
At the time, the 55-year-old Ms Drew was the bank's chief investment officer and one of the most important women in finance.
Now, Ms Lake, when she takes over as the chief financial officer in 2013, will become the second woman on JP Morgan's key operating committee, alongside Mary Callahan Erodes, the head of its asset-management arm (for his part, chief executive officer Jamie Dimon made clear in an interview with the Wall Street Journal that naming a woman for the post "wasn't a consideration at all – we were simply looking for the best person the job").
Notably, according to reports, another leading candidate for the JP Morgan job was Blythe Masters, the bank's commodities chief.
But it isn't all about jockeying for position, particularly in an area where money-making is central to everything. The gender gap when it come to Wall Street pay remains inexcusably wide. The six job categories with the greatest gaps are in the financial sector, according to an analysis published by Bloomberg earlier this year.
Women in the six categories, which include insurance agents, securities sales agents and personal advisers, earn 55 to 62 cents for every dollar banked by men, according to the figures. The only category where the median female salary exceed male earnings was the one that covers personal care and service workers, including butlers, valets and shoe-shiners.
In high finance, moreover, while progress is evident in many areas such as research (think, for instance, of Meredith Whitney, the high-profile banking analyst) and human resources, some areas, such as the trading floor, remain skewed in favour of men.
Wondering why, Heidi Miller, Mr Dimon's one-time lieutenant and the former head of JP Morgan's international business, recently put it down to "self-selection".
"You're working every weekend. Some women realise that the odds of being a successful big swinger are not high. The investment banking pipeline is equal, but the attrition rates are really high for mid-level women," she told the Wall Street Journal earlier this year.
This obliquely underscored the fact that, while progress has been made since the days when, according to an anecdote in the book Wall Street Women by Melissa Fisher, Merrill Lynch trainees were expected say that the thing that most interested them about women was their beauty, much still needs to be done.
Incoming CFO, JP Morgan Chase
Currently the chief financial officer of JP Morgan Chase's consumer banking arm, Ms Lake is a veteran of the vast business. During the credit crunch, she was among the key players at JP's investment-banking division as global controller from 2007 to 2009, getting a close-up look at the crisis as her firm took over Bear Sterns. Earlier, she served in the corporate finance division, and before that was a senior executive at JP Morgan's UK business. With a background in accountancy – she began her career at PriceWaterhouseCoopers – she will take over as the group looks to put the multi-billion dollar "London Whale" trading loss behind it.
Mary Callahan Erdoes
CEO, JP Morgan's Asset Management division
Nicknamed Wall Street's "$1 Trillion Dollar Woman" by Forbes magazine for the more than $1trn (£628bn) in assets under management she oversees at JP Morgan's asset-management arm, Ms Erodes will be the only other woman across the table from Ms Lake when she joins the bank's operating committee. Considered a potential runner for chief executive officer Jamie Dimon's job when he leaves, she frequently shows up in lists of the most powerful women in American business. Earlier this year, her division came out on top after the "London Whale" trading fiasco, when reports indicated that while risky trades were being racked up in the UK, a fund in the asset management arm was (wisely, it turned out) on the other side of the bet.
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