Head Scratchers

Citigroup Takes The Wall Street Boys’ Club To A New Level

We all know Wall Street is a boys’ club, but Citigroup just took it to a new level. Chief Executive Michael Corbat announced a long list of promotions and executive changes at Citigroup on Monday and not a single woman made the list. The only woman named in Corbat’s 800-word memo was Sara Wechter, his new chief of staff, who held the same role for Chairman Michael O’Neill. But All 13 of the executives now reporting directly to Corbat are men.

This is not to say there are zero female executives in the whole company, but the number is small and none of them report directly to the CEO. As Kevin Roose of New York Magazine wrote, “It’s starting to look like a White House advisory meeting over there.”

This is not a good move for Citigroup, as it been a rough couple of years for the bank in terms of negative press. Steven Eckhaus, a partner at Katten Muchin Rosenman LLP and a Wall Street compensation advisor, told American Banker, “When something like this happens, the board will pay attention,” says Eckhaus. “I’m sure the board and human resources and the upper level of the C-suite will look into why this is.”

Promoting more women could have been a way to stand out from the pack. Women only account for only  2.7% of the chief executives in the financial industry, and 16.8% of the executive officers in the U.S. According to the MSCI World Index, finance is the most lopsided industry when it comes to appointing women as directors and promoting them to management positions, according to data compiled by Bloomberg. The index shows how banks, insurers and asset managers in the index of stocks in 24 markets have a disproportionately low percentage of female board members compared with employees, 51% of whom are women. Finance also scores lowest in matching the percentages of women workers and managers. It’s “reprehensible for an industry to have a high level of women employees and a low level of women in management and on the board,” said Joe Keefe, chief executive officer of Portsmouth, New Hampshire-based Pax World Management LLC and chairman of the nonprofit Women Thrive Worldwide in an interview with Bloomberg. “It is evidence of failure to hire, to promote, to retain and to mentor the women.”

Sallie Krawcheck, one of the former most powerful women on Wall Street (and frontrunner for head of the SEC) told Marie Claire recently that fewer women make it the top in finance because instead of actually promoting them instead they are made to go through mentoring programs, join networking groups, and get special training. Doing all this still does not get women promoted, it just gives them more things to do, said Sallie. “We’re putting women on diversity councils; we’re putting them in mentoring programs; we’re giving them special leadership training, telling them how to ask for promotions — but we are not promoting them. My goodness, we’re just making women busier. There needs to be a rethink about how to make them successful in these organizations.”

But not promoting women is also hurting the financial industry. Multiple studies have shown that women outperform men in trading and hedge funds run by women are making bigger returns. Financial companies with several high-ranking women at either officer or director levels tend to have higher earnings per share, return on equity and stock prices than competitors with few or no senior women.

So you may want to let some girls into your heeman woman’s haters club Citigroup.

TAGS: news | sallie krawcheck | wall street | women in finance

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