Sallie Krawcheck, arguably the most powerful woman on Wall Street in her role as head of Bank of America Merrill Lynch global wealth, stepped down Tuesday night from her position. Krawcheck is the latest woman to lose her important and powerful status on Wall Street in a long line that has been increasing at a very fast rate since the financial crisis.
Krawcheck’s exit is very upsetting for a few reasons. First of all, her departure has now made women on Wall Street in leadership positions an even rarer breed. In the U.S., women account for only 2.7% of the chief executives in the financial industry, and 16.8% of the executive officers, according to a study by Catalyst. That number has decreased slightly today with Krawcheck’s exit. Since the financial crisis in 2008, women at the top have been taking a lot of falls: Erin Callan, the chief financial officer at Lehman Brothers, left months before the investment bank filed for bankruptcy. Zoe Cruz, the co-president of Morgan Stanley, was ousted in a management shake-up in late 2007. Terri Dial lasted just a year as chief executive of Citigroup’s consumer business in North America. And Heidi Miller, the head of JPMorgan Chase’s international efforts who was once viewed as a potential successor to the chief executive, Jamie Dimon, is set to depart the company early next year.
Secondly, the loss of women in leadership positions does make an impact on younger women in the industry. Wal Street has already experienced a profound loss of women from the industry in general in the last few years because of the environment being so male-dominated and the personal life sacrifices the job requires for less compensation than in previous years. But another reason is why a woman would stay when she has no role model at the top to look up to. Sylvia Ann Hewlett, founding president and chairman of the Center for Work-Life Policy, said of the increasing departure of women from Wall Street since 2008:
More than anything else, the things that distinguished women from men in 2008 was that they hated what happened to the reputation of Wall Street. Women seemed to care a lot about the status, the integrity and the mission of their company, and when that became tarnished, that was a real dealbreaker for women. …It was pretty important for them to work with a company they could feel proud of. … Men are more likely to just tough it out, because in the end the paycheck and the comp package is tremendously important to a lot of men. One of the highlights has been huge growth the numbers of older women in finance, those over 55. They were the pioneers in a way. Two-thirds of them probably did not get married or have children, so they did pay a pretty big price.…Once a whole bunch of pretty senior women leave from a firm, there are no longer mentors or role-models or the sponsors you need to anchor the younger women. So it kind of cascades down.
It should be noted that Krawcheck was actually not fired but was demoted. Instead of reporting to Bank of America’s chief executive, she would have reported to David Darnell, head of Bank of America’s commercial banking operations. But experts believe that Bank of America CEO Brian Moynihan knew this set up would result in Krawcheck leaving the company. “For a person at her level in this business, it just doesn’t make sense for her to report to anyone below the CEO level,” a person familiar with her thinking said. As Deal Journal writer Shira Ovide wrote:
“Senior female executives on Wall Street are like bald eagles: Majestic, but extremely rare. And each top woman who leaves or is forced from her post will spark anew the “whither women” questions and stories about why Wall Street is dominated by dudes. At this point, Wall Street would love a few more top-ranking women, if only to stop those pesky questions.”
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