Women on Wall Street Have Gone Backwards
Politics / Social Issues Feb 12, 2014 - 04:06 PM GMTBy: Bloomberg
Sallie Krawcheck, owner of 85 Broads and former Bank of America and Citigroup executive, spoke with Bloomberg Television's Stephanie Ruhle and Matt Miller today about women in executive roles and Federal Reserve Chairman Janet Yellen's congressional testimony yesterday.
On women in banking, Krawcheck said: "it's not that we have even gone sideways as we have in corporate America, we've gone backwards."
Highlights include:
*WOMEN IN BANKS HAVE GONE `BACKWARD' SINCE CRISIS
*'ENORMOUS OPPORTUNITY' TO SELL SERVICES TO WOMEN
*GENDER PAY GAP DIMINISHES AS WOMEN RISE FIRM RANKS
*SOCIETY STILL LESS ACCEPTING OF STAY-AT-HOME MEN
STEPHANIE RUHLE: Sallie think about your meteoric rise on Wall Street and still we do not see a woman running a bank. We've got Janet Yellen running the Fed, we have Mary Barra running GM, Hillary Clinton could be the next president. What gives in banking?
SALLIE KRAWCHECK: Well it's not that we have even gone sideways as we have in corporate America, we've gone backwards.
RUHLE: Why?
KRAWCHECK: Why? Because this is what happens during crises. And what I saw when I was on Wall Street is it's not, well let's get rid of people who are different from us because they've got cooties. It's more, yeah I know the numbers around diversity and the diversity adds to business results in theory, but we are in a crisis mode and I need that person who I can trust today.
RUHLE: But every bank, hold on--
MILLER: They'll have an African-American CEO, just hang on one second.
RUHLE: All right.
MILLER: They'll have an Indian-American; you know they understand the advantages of diversity it seems. Unless it comes to gender in which case it's off the table.
KRAWCHECK: Yeah. The numbers speak for themselves. And I don't know that it's off the table, but again, what I've seen a lot of is, I gotta have this person in this job because it's so important. And what we find and the research shows when we're under periods of stress, that person who you feel like, I see how that person can do the job, is typically someone who looks like you.
RUHLE: Well every bank out there has women on Wall Street, this diversity committee, this women's initiative. And all of them ask Sallie Krawcheck to be the keynote speaker at their million dollar conferences. Are they all a bunch of bull?
KRAWCHECK: I wouldn't go that far because I think there is a genuine understanding of the importance of diversity. Look when I think things are truly going to change is when we begin, when the industry begins to recognize the market opportunity in women. Women are, you know, responsible for 100% of the change in income over the past you know decade.
Women are going to college and graduating from college and graduate school at a greater rate than men. Women are starting businesses at a greater rate than men. And women are unhappy with the financial services industry.
You and I were talking earlier Stephanie; there is a stunning number which is that when women's husband's die and we women live longer than you gentleman I'm sorry to tell you.
RUHLE: Take that--
MILLER: I'm happy about that.
KRAWCHECK: There are a lot of reasons for it. But we women leave our financial advisors 70% of the time. 7-0.
MILLER: Because you're not happy with the job they're doing. And previously, I mean why wouldn't they have changed before their husband died?
KRAWCHECK: Because the two of them have the financial advisor.
MILLER: Right.
KRAWCHECK: And what we've found when I've done a ton of research on this, is that she will feel like the two of them are talking to each other and she feels that she's outside that circle. So there's an enormous opportunity in financial services, speaking to and solving problems for women.
RUHLE: Let's talk about income parity. When you look at the challenges families face, Barbara Corcoran right on this set said to me, what's the issue women face, the fact that they have children. And I didn't want to accept that answer. But when I actually went home and thought about it, the older your kids get the more challenges they face. You and your spouse could look at one another and say, something's got to give here. Someone has to go home. And as long as women are making 70¢ to a man's dollar it's going to continue to be the woman. What do we do about that?
KRAWCHECK: Well you know you bring up an interesting point. And by the way, I did never get the memo that said it gets tougher as your kids get older. I sort of thought if I got through those infant and toddler years, here we go.
RUHLE: I'm going to give you some Spanish homework, it's hard.
KRAWCHECK: Oh my gosh it gets harder. But you know, it comes back to the same issue. When you have more women at the top, the gender pay disparity within companies compresses.
RUHLE: One more time?
KRAWCHECK: When you have more women at the top of companies, the gender pay disparity within the company compresses.
MILLER: So it goes down from 30¢ to 20¢?
KRAWCHECK: To 20¢ to 15¢. So part of the way to solve it is to get more women to the top and help compress it.
MILLER: And Mary Barra by the way, at General Motors now getting about twice what her predecessor got. Of course she has been working in the industry for a lot longer than he ever was. She's a trained engineer and she's a total products fanatic, the way Dan Ackerson maybe wasn't. So it makes sense. Do you see that at the top, the same kind of disparity as you see in the ranks, with the foot soldiers?
KRAWCHECK: So look you're using an example. And one example is good.
MILLER: Yeah.
KRAWCHECK: And it's one example.
MILLER: No but I'm just saying, when you get to the C Suite, do you see the same kind of 70¢ on the dollar--
KRAWCHECK: You've got such a small sample.
MILLER: Right.
KRAWCHECK: Right? So how do you compare this one to those five if there are not that many of them?
MILLER: Well people in the C Suite are comparing as much as they possibly can aren't they?
KRAWCHECK: Of course.
RUHLE: Can we talk about culture for a moment. Even if business-wise we are ready for women to lead and women to take charge are we actually ready for men to stay home? When I read the "New York Times" article about these women on Wall Street who now have stay-at-home husbands, I actually cringed for a moment.
I'm not proud that I cringed for a moment, but when I meet men at cocktail parties and they tell me they're stay-at-home husbands, I can watch their neck's tense up. Tense in a different way than women who say, guess what, I stay home and I have Soul Cycled 17 times this week. Are we ready for men to stay home?
MILLER: Well when I tell women at parties that I want to be a stay-at-home husband, they tend to shy away.
(LAUGHTER)
MILLER: It doesn't, they're not coming in droves after they hear that.
RUHLE: When you date women, they want you to pay for everything?
KRAWCHECK: Are you sure that's the reason?
(LAUGHTER)
KRAWCHECK: I'm just asking. I don't know--
MILLER: I'll tell you what. No here's the truth and I'll be, I don't want to cause any--
RUHLE: We want the truth.
MILLER: When I date women they, even if they say they don't, of course, they expect me to buy dinner you know? Of course on Valentine's Day I'm going to pay more money than a woman does.
RUHLE: You bring up a good point. I don't want my husband to buy me a gift with my money. I want it to be the money he made. I don't want to admit this out loud, but it's how I feel.
KRAWCHECK: Well and so in many ways, we continue to have these gender stereotypes. For us women we have in some cases for those who are fortunate, a number of choices. And a choice can be to go home and a choice can be to stay at work. But our society today is not yet as accepting of those choices for men.
And so you know look, if achieving the performance results that diversity indicate, the diversity research indicates exist were easy, it would be easy and we would do it.
MILLER: I wonder Sallie what the biological studies say about, look when I was in the hospital, my mom hung out with me. And guess what? I wanted my mom to hang out with me. I love my dad too, but I needed my mother. And I wonder if children also need their moms.
RUHLE: There's a lot of a me Tarzan, you Jane. We grow up with men hunting, gathering and protecting. Are we ready as adults to say, I'm going to hunt, I'm going to gather. You watch my kids.
MILLER: As a species.
KRAWCHECK: OK but there are a couple of things. There's the day-to-day and then what we're talking about is the acute crisis. I had the same thing. When my son was in the hospital, you couldn't pull me out of that room. And my husband, anybody want a coffee?
MILLER: Right.
KRAWCHECK: So I do think the acute though is different from the day-to-day. And we struggle to have that balance at home between couples.
MILLER: But you're programmed. A mother will kill for young right?
RUHLE: (inaudible) kill for my kids. Well I want to bring in Sheryl Sandberg you know, waving the flag for women more than anybody out there. Has said she doesn't think women lean in enough. This is what she said on "60 Minutes."
(BEGIN VIDEO CLIP)
SHERYL SANDBERG, CHIEF OPERATING OFFICER, FACEBOOK: I'm not suggesting women are ambitious. Plenty of women are as ambitious as man. But I am saying and I want to say it unequivocally and unapologetically, that the data is clear that when it comes to ambition to lead, to be the leader of whatever you're doing, men, boys outnumber girls and women.
(END VIDEO CLIP)
RUHLE: Do you agree with that?
MILLER: Wow.
KRAWCHECK: Well if the research says it, the research says it. I, we all know--
RUHLE: But how do you feel?
KRAWCHECK: I leaned in. I leaned in awfully far.
MILLER: But do you feel like you were ahead of the pack? Ahead of the female pack? I mean when you're hanging around with a bunch of women who aren't at 85 Broads, who aren't focused on business and Wall Street, are you typically, I mean you're the alpha female in the group.
KRAWCHECK: I worked my tail off. I mean there was no doubt that I loved my jobs so much. And for so many years that I loved working. And so I did, was off the curve in terms of the effort and time they put in. A lot of it was when my babies were sleeping though.
RUHLE: OK but let's talk about that. Is there an ugly truth we're not talking about? You put in the time, what about women now who get great career opportunities? They go to graduate school, they get out of grad school and they're 34, they go into investment banking and don't see the light of day until they're 43 and then guess what happens? They don't have a chance to have kids.
KRAWCHECK: Yeah.
RUHLE: Are we ignoring the fact that women are their most fertile when they're 19.
KRAWCHECK: I think a smart thing that I did was had my kids early. I don't know that it was smart at the time or it felt like I was making a conscious decision.
MILLER: Well you can't always decide can you?
KRAWCHECK: Sure.
RUHLE: But can you have--
MILLER: What if you haven't met the right guy you know?
RUHLE: Come on does an investment bank really want to hire a woman whether they're saying it out loud or not, if an investment bank is recruiting at Duke, at UNC, and they meet a bunch of 32-year-old women and those women are maybe engaged, maybe want to have kids. Do they really want to hire that woman knowing in the next two years she wants to have a baby and plan a wedding?
KRAWCHECK: I don't know that it's much of a problem honestly has been the pipeline. Because a lot of the pipeline numbers have greater balance and we lose the women during the course of their 30s and 40s. Look I made a decision for my family and us. I was an investment banker in my 20s and as I was pregnant with my son and had my son, made a decision that that wasn't the right choice for our family. So I became a research analyst.
I worked harder as a research analyst than an investment banker. But I owned my time. And I've said before, I never had a client who said I reject this research report because you did it on a Saturday night after your son was sleeping, not on a Thursday afternoon. Never happened.
RUHLE: Did anybody pay you less because they knew you were only half the income of your house?
KRAWCHECK: Not to the best of my knowledge.
MILLER: Speaking of the ugly truth, I mean Tim Armstrong has had some slips lately and the truth tends to come out when he does that. Listen to what he had to say.
(BEGIN VIDEO CLIP)
TIM ARMSTRONG, CHIEF EXECUTIVE OFFICER, AOL: We have focused on things that are long-term human needs. So if you think about you know the Huffington Post, everybody needs news every day. If you think about Tech Crunch, technology is probably the biggest cultural trend in society. The third one is women and women we think are underserved on the internet.
RUHLE: So there you go. In prepared remarks--
MILLER: They're underserved on the internet right? Although they're well represented on the internet. There is a problem because when he's really saying what he thinks he's talking about babies that cost the company too much money. And the mother's that had those babies were pretty angry about it.
RUHLE: I guess is the truth here, when Tim Armstrong and CEOs make public remarks, they say all the right things about women. But when they're talking about the bottom line and things that matter to them, it's about babies and women's issues and how they're problems.
KRAWCHECK: Well I didn't hear that in his comment. You know because he could just have easily have talked about someone who was elderly and having an issue. You know one of the employees. So I didn't take it as far as you did. But you know he might be well served by scripting himself.
RUHLE: Janet Yellen's first remarks yesterday. You're a woman many people thought we would be seeing in DC right around now. What did you think of her testimony?
KRAWCHECK: It was lengthy.
MILLER: Long.
KRAWCHECK: It seems to be the new style to--
MILLER: To do your own Woody Allen impression?
KRAWCHECK: No to do--
MILLER: Did she not sound like she was doing Woody Allen? Am I the only one who thought that?
RUHLE: No she didn't sound like, and let's think about her content. Because I have an issue, you know, let's stop talking, you know the amount of Bloomberg's for men in the business that I got yesterday--
MILLER: It was just the way she was talking.
RUHLE: What did you think of her hair? Her jacket? Really? I was never talking about Greenspan's glasses. What did you think about what she said?
KRAWCHECK: I think the new style here is to do as long a testimony or press conference as you can. And I think it boils down almost to, nothing to see here. Move along. Nothing to see here. Because the comments were steady as she goes. There's going to be continuity. And even this comment, which is worth noting, is along the lines of, geez we have to continue to be creative and think creatively because we're at extremes.
MILLER: I have to say if you didn't notice Alan Greenspan's giant nose and ears, if you watch Chris Christie and don't notice that is he is tremendously overweight, then you are a much purer person than I would have thought.
I oftentimes look at men giving presentations and if they look terribly different, then I take that to heart. But I wasn't commenting on her appearance. The way she speaks, to me, sounds like the way Woody Allen speaks.
RUHLE: All right I'll give you that. But do you think in general we're putting a lot of pressure on women leaders and the way they speak. The amount of time I've had to listen, hear about people talk about Hillary Clinton and her hair.
You were mentioning earlier, how many hours a week do women spend on prepping themselves, their appearance. I think I spent more time on my hair today than Matt, but I'm not sure.
(LAUGHTER)
KRAWCHECK: I'm almost certain of it. OK so it looks like we're transitioning from the testimony. But--
MILLER: Well let's be honest. Janet Yellen's testimony was never expected to be anything different than Ben Bernanke's line.
KRAWCHECK: Which is great.
MILLER: She's towing the Fed line. And she didn't stray from the script at all--
RUHLE: Hold on then, hold on.
MILLER: That's why there's zero news out of that.
RUHLE: Wait, wait, wait taper is what we wanted to hear from her. What she had to say, because taper is the most important thing.
MILLER: We got exactly.
RUHLE: Let's just take a quick look, let's hear what she says.
(BEGIN VIDEO CLIP)
JANET YELLEN, BOARD OF GOVERNORS CHAIR, FEDERAL RESERVE SYSTEM: Well I think a significant deteriorating in the outlook either for the job market or concerns you know, very serious concerns that inflation would not be moving back up over time. But the committee's emphasized that purchases are not on a pre-set course and we will continue to evaluate the evidence.
MILLER: So exactly, exactly as you would have expected the man with the beard--
RUHLE: I can't believe I'm saying this; she did sound like Woody Allen.
(LAUGHTER)
MILLER: Didn't she? Does she not sound like Woody Allen? And by the way, Ben Bernanke with his beard and you know--
KRAWCHECK: OK kids, OK kids.
RUHLE: Yeah she did.
KRAWCHECK: So look it is business as usual, stay the course and what that said is we're going to do what we're doing until things are different and then we'll look at doing something different. Stay the course. Which is great.
RUHLE: Is that the right message?
KRAWCHECK: Of course it is. Of course it is. Right? And that's what we got with Janet Yellen. I mean if we wanted someone to do something tremendously different, you know, we should have gone with someone tremendously different.
RUHLE: Like Larry Summers.
KRAWCHECK: She has a career in the Fed, she worked with Bernanke. So this is a continuity.
MILLER: And just like Bernanke she wants to encourage Congress to do their part. Listen to what she says about monetary policy.
(BEGIN VIDEO CLIP)
JANET YELLEN, BOARD OF GOVERNORS CHAIR, FEDERAL RESERVE SYSTEM: Of course monetary policy is not a panacea and I think it's absolutely appropriate for Congress to consider other measures that you might take in order to foster the same, the same goals.
(END VIDEO CLIP)
MILLER: There you go. So just like her predecessor. I mean I wish she would step out and say something unexpected.
RUHLE: But the market's doing well. Shouldn't she want--
MILLER: The market isn't her only client right? She's got other things to keep in mind. You can't wait until you see the whites of inflation's eyes before you shoot.
KRAWCHECK: Well that's a different question.
MILLER: Right.
KRAWCHECK: That's a different question. But yes she did encourage Congress to do something. I think we would probably all agree the chances of that are slim.
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