What happened to Sallie Krawcheck? Was her departure from Bank of America a matter of sexism or boardroom politics? Probably some of both.
As part of the changes at Bank of America, David Darnell, who previously ran Bank of America’s commercial banking operations, is now running wealth-management operations previously overseen by Krawcheck-which included its Merrill Lynch Wealth Management team of financial advisors.
The wealth management story is curious since Krawcheck seemed to be doing just fine-better than that, really.
Under her direction, second-quarter global wealth and investment management profit rose 54 percent over the prior year.
Forbes wrote last week that “”The stressed relationship between Bank of America and Merrill Lynch just got uglier…” “Krawcheck is out after just two years on the job as head of Merrill’s powerful brokerage force of 16,000 financial advisors. Since BofA purchased Merrill in 2008 the brokerage unit has been pumping out profits for struggling BofA. No replacement has been named for Krawcheck and it seems BofA will keep it that way.”
So what went down?
For one thing, a number of Merrill Lynch veterans were surprised that Krawcheck was not offered the co-chief operating officer position that Darnell got, CNBC.com recently reported.
“They had assumed that the great performance of Bank of America’s wealth management business would keep Krawcheck safe in her position. Krawcheck didn’t get fired but would have been demoted under the latest BofA restructuring. Instead of reporting to Bank of America’s chief executive, she would have reported to Darnell.
“Krawcheck decided to leave-as Bank of America CEO Brian Moynihan knew she would,” CNBC reported, going on to quote a senior Merrill executive saying he now wonders if Krawcheck’s stellar performance may have “written her pink slip.”
“[Company CEO Brian] Moynihan feels like he’s under siege. Krawcheck was a possible replacement for him if the board lost faith in Brian. With her gone, his job is safer,” the executive said.
There’s more to the Krawcheck saga.
Observers saw her as a strong leader who had been vehemently opposed to Bank of America’s policy of cross-selling products including financial advice.
Tensions between Krawcheck’s wealth management team and its parent company ignited when brokers began feeling pressure to sell BofA banking products like debit cards, online bill pay and credit cards.
“Back in May Krawcheck said she didn’t even like the term cross-selling saying it sounds like something we do to rather than for you,” Forbes observed.
Then too, Krawcheck was outside the boy’s network at a time when where women in finance still earn significantly less than men (70.5 cents for every dollar men made in 2009, according to a Bureau of Labor Statistics report released this past February) and when there are still only around 17 women among the 200 most senior bankers on executive committees or at similar levels.
“Sometimes you have to wonder: Do banks hire Sallie Krawcheck just so they can fire her when times get tough? one reporter mused.
“It almost seems to be her role to repeatedly rise to become ‘the most powerful woman on Wall Street’ only to be cut loose by a more powerful man.”