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It's been more than 25 years since the biggest names on Wall Street began being hit with widespread claims of sexism. Every time they raised millions of dollars, bank leaders faithfully promised to make their companies more welcoming to women who wanted an equal chance to succeed in a high-paying, mostly male industry.
These days, Jane Fraser runs the company that faced the most horrific accusations, Citigroup, and is the first woman to hold the position of CEO of a major American bank. At Morgan Stanley, another firm that has settled there, 40 percent of total employees and 47 percent of junior employees are women. Goldman Sachs, which paid $215 million last year alone to settle long-standing gender discrimination claims, can also boast that its latest class of new partners was its most diverse yet, with 29 percent women.
So some things have changed. However, the upper echelons of American finance are still overwhelmingly male. As many as 45 percent of financial companies in the Standard & Poor's 500 index do not have women among their “designated executive officers,” those members important enough to formally disclose their salaries, according to new research by Morningstar Sustainalytics. Other stereotypically male sectors have made much greater progress: only 26 per cent of industrial companies are led by all-male teams, says stewardship director Jackie Cook.
What's even more frustrating is that it seems as if some things are going backwards. At Goldman, Stephanie Cohen, the sole head of a core department, has been on an extended leave since the middle of last year, and it recently emerged that another member of the management committee, Beth Hammack, will leave after being passed over. For the financial director.
Meanwhile, Citigroup appears to be moving back to the center following Fraser's flagship appointment. The bank's selection last week of Vis Raghavan to head banking means that all five of its chief operating officers and chief financial officer are men.
Although Morgan Stanley has its second CFO in Sharon Yeshaya, all three candidates in last year's race to replace James Gorman as CEO were men. The senior leadership of private equity firms vying for talent on Wall Street is equally, if not more, male-dominated, as are the major British banks following the forced departure of Alison Rose from NatWest in 2023.
That makes it worth looking closely at JPMorgan Chase, where longtime CEO Jamie Dimon has taken credit for building a pipeline of female hitters. Women make up nearly half of the 16-member management committee, including the chair or co-chair of all three major companies. In the recent reshuffle, two of them, Jennifer Piepszak and Marianne Lake, have strengthened their position as leading contenders to replace Dimon, should he retire.
JPMorgan benefits from having large commercial banking and asset management divisions, which are widely seen as more suitable for women than the rough and tumble trading floors and travel-heavy investment banking. These days, the bank also exudes an aura of success after a difficult period that saw it rise to become the largest bank in the United States.
This combination gave Dimon a larger pool of mid-career women from which to hunt future leaders, and rivals acknowledged that the bank did its best not to squander these opportunities.
But no Wall Street firm serious about wanting diversity of thought and experience in its senior leadership can rest on its laurels. Post-financial crisis reforms in 2008 and the rise of Big Tech have meant that banking has lost some of its employment magic and financial muscle. Women who have access to senior management in banking are also in demand in other industries, so they don't have to sit and wait their turn for a chance at the top on Wall Street.
Ruth Porat, Morgan Stanley's first CFO, famously moved to Google in 2015 to do the same role for more money. Most recently, Thasunda Brown Duckett left JPMorgan Chase to head the investment group TIAA, and Katie Koch left Goldman to take on the CEO role at asset manager TCW. Hammack's post-Goldman destination is already being eagerly discussed by recruiters scrambling to fill a slew of open CFO positions.
Executives at major banks say such job-hopping is nothing new. Aspiring bankers of any gender don't like to be asked to sit and wait for a simple task. Men who were tired of waiting for the opportunity to lead JPMorgan, Morgan Stanley and Goldman are now all over the top at other companies, and it stands to reason that some women are following the same path.
But my conversations with senior women in finance suggest that such complacency is a mistake for an industry that still has a small number of mid-career women. Although overt gender discrimination is thankfully very rare, they suggest that many managers still prefer people they feel comfortable with, and that men with an uncompromising management style are rewarded with challenging tasks in a way that women are not.
So when headhunters come from abroad, many rising female Wall Street executives tend to listen. Who wants to wait in line for an uncertain leadership opportunity, when she can go somewhere else and take charge now?
brooke.masters@ft.com
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