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Breakfast at the Berkeley with an admirer, Adrian. The Berkeley, a luxurious London hotel, is part of the Savoy Group. The Blackstone Group, a private equity firm, bought the Savoy Group in 1998 for £520 million and then sold it to Irish property investors Quinlan Private in 2004 for £750 million.
Adrian was complaining – about the toast. “Ten years ago, when I used to come here for breakfast, the toast was fantastic,” he moaned. “Thick, hot slabs dripping with butter. There was one old guy, Larry, whose sole job was to make the toast. As soon as the private equity boys came in, Larry was out and the toast is rubbish.” Adrian waved a skinny slice of cardboard Hovis under my nose and glared at me: “This is not progress, Abigail,” he t hundered.
I remembered Adrian’s words about progress when I read an interview with Polly Courtney. Courtney is a 26-year-old who joined Merrill Lynch soon after leaving Cambridge. She lasted a year and, this November, a fictionalized account of her experiences, Golden Handcuffs, will be published. In the interview, Courtney complained about several aspects of Wall Street life – the drudgery of being an intern, the long-hours culture and the chauvinism of some of her colleagues. She claims: “Of the 32 graduates who joined in my year, there are three left today and all have moved out of that department.”
And this is a trend: young people sneer at corporate life. According to my 21-year-old godson: “It’s ‘loserville’ to be a corporate cog.” The chief executive of a global financial services recruitment agency told an investor recently that his daughter had no interest whatsoever in a City career. Perhaps she is wise. Women find it hard to succeed in finance. Salacious tales abound: trading-floor gropes, a crony culture and late-night excursions to lap-dancing clubs. Zoe Cruz (co-president of Morgan Stanley), Sallie Krawcheck (Citigroup’s chief financial officer) and Heidi Miller (head of JP Morgan Chase treasury & securities services) are the exception not the rule. Why? After 20 years in the industry and many years of pondering the question, I have still not found the answer. But one thing I do know is that there has not been much progress on this issue since I was a graduate trainee at Merrill Lynch in the 1980s.
For the media, of course, sexism is sexy. The story has underdog appeal. However, one friend sniffed: “Oh Abigail, that whole overcoming adversity theme is so over. People don’t overcome adversity any more, they sue.” And maybe she’s right. There are many Wall Street lawsuits. Few investment banks have escaped. Dinosaur Dan, a banking manager, moaned: “I often wonder if employing the fairer sex is worth it.” These are dangerous words in today’s politically correct environment. But some executives at Dresdner Kleinwort might agree with Dinosaur. This January, six women filed a class action gender discrimination case in New York against Dresdner’s investment bank. The suit claims potential damages of $1.4 billion. Whatever the merits or otherwise of the case, it’s an outrageous amount to claim given Dresdner Kleinwort’s 2005 profits (before tax and interest) were only about $260 million.
According to the 70-page complaint, which it must be pointed out is vehemently challenged by Dresdner officials, women at Dresdner Kleinwort confront a glass ceiling that denies them promotion, compensation commensurate with male colleagues and equality as regards the terms and conditions of their employment. It is claimed that three plaintiffs were discriminated against when they returned from maternity leave. One heading reads: “Mommy-tracking to prevent promotion to Managing Director”. And it is alleged that in May 2005, less than 2% of managing directors in the capital markets division were women. That amounted to four women and 254 men. Pretty pathetic, if those statistics are correct (Dresdner would not comment on them), although I doubt the figures would be too different at many other firms. And it’s worth remembering the publicity blitz that accompanied the initial announcement of the class action – some muttered that the Dresdner Kleinwort Six were employing as many spin doctors as legal advisers.
The case continues. Last month, Dresdner failed in a motion to have “scandalous, immaterial and impertinent allegations” struck out – including a claim that a male managing director regularly brought prostitutes into the office during lunch hour. “Incidents of perceived sexism may be admissible to demonstrate a defendant’s discriminatory intent,” ruled Judge Deborah Batts.
I spoke to the plaintiffs’ silky-smooth lawyer, Douglas Wigdor, of New York-based Thompson, Wigdor and Gilly, about Batts’s ruling. “It’s important to note,” he told me, “that all Ms Smith’s substantive claims survived.” Katherine Smith, a director of equity sales, who alleges that she was dubbed “the Pamela Anderson of trading” by her boss, is American but works in Dresdner Kleinwort’s London office. The next milestone in the case, according to Wigdor, is the application by the plaintiffs to have the case certified as a class action.
A Dresdner spokesperson said: "We regard this lawsuit as a baseless attempt to damage our reputation, and the allegations are contrary to everything for which our company stands. Dresdner Kleinwort is a committed equal opportunity employer that seeks to provide a work atmosphere that is free of unlawful discrimination. We will continue to contest the claims, bringing to bear all necessary resources to defend and protect our employees and reputation." But, at least for now, the case appears to have legs.
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| Monica Wong loved to dance. In late 2003, she was taking six lessons a day, seven days a week. Where does the woman get her energy from? HSBC is fortunate to have such a motivated employee |
And talking of legs, dancing dervish Monica has been vindicated. Sixty-one-year-old Monica Wong, HSBC’s head of Asian private banking, won a court order for the return of HK$62 million (approximately US$8 million) paid in advance for salsa lessons. Wong fell out with her Latin dance instructor, Mirko Saccani, at a public practice session in Causeway Bay. Apparently, Saccani (who has an MBE for services to the performing arts) screamed and swore at his pupil and then barked that he never wanted to see her again.
Judge Muttrie found both Saccani and his wife, Gaynor Fairweather (the second defendant), poor witnesses. He said of Fairweather: “She kept trying to assert the unassertable, such as that her husband did not use the word ‘fucking’ when it is quite clear from the telephone recordings that he uses it with the frequency of a labourer.” Note to Muttrie: aren’t you being unfair to labourers – most of whom swear in their native Polish tongue? Perhaps “City trader” would have been more appropriate?
Monica loved to dance. In late 2003, she was taking six lessons a day, seven days a week. Judge Muttrie again: “These were 45-minute lessons and latterly she would attend for three of them at lunchtime and three after the end of the working day, with different arrangements at weekends.” Where does the woman get her energy from? HSBC is fortunate to have such a motivated employee. The judge did describe Monica’s passion for dancing as an “obsession” before musing: “It is common enough for any professional person to act, in private life, in a way which one would not expect him to act professionally. That is particularly so when the person is acting in pursuit of some private matter which concerns him or her obsessively.”
Muttrie is more tolerant than most boards or investors. He implies that different standards should apply to professional and private life. But I don’t believe the world works this way. Indeed, during the case, one well-connected Hong Kong source opined: “Whether Wong succeeds or not, her career is tainted. Much too high profile for a private banker.” And think about Harry Stonecipher, who lost his job as chief executive of Boeing because of his passion for a female employee. The headline in the London Evening Standard shrieked: “Bonking Boeing boss sacked.” As far as I’m concerned, the professional and the private arena are linked like Siamese twins.
Hot off the press: I hear rumours that Hope Pascucci, Deutsche Bank’s co-global head of capital markets, may be looking for a change. A change of pace not of employer. Hope, often referred to as the ‘first lady of the Euromarket’ has always been a hero of mine. An articulate competitor describes her as: ‘The Margaret Thatcher of the capital markets. A consummate professional: tough, intellectually rigorous, she just gets on with it.' A source murmured that London’s loss may be New York’s gain. More on this story soon.