Sallie Krawcheck

Sallie Krawcheck (born 1964) is the former Chairman and Chief Executive Officer of Citi Global Wealth Management (GWM) in charge of the Citi Private Bank, Citi Smith Barney, and Citi Investment Research, which comprises the second-largest wealth management business in the world, with nearly $1.8 trillion in client assets and $13 billion in revenue.

As perhaps the most powerful woman in financial services, Krawcheck’s meteoric rise on Wall Street was attributed to her success in turning around and accelerating growth in a number of underperforming financial services businesses.

Early in her career, Krawcheck was a financial analyst at Salomon Brothers, and then was an associate in the Corporate Finance department of Donaldson, Lufkin & Jenrette.

Krawcheck was asked first to run Smith Barney, when that firm was threatened by the research scandals of the early 2000s, and then to become the CEO of Wealth Management by former Citi CEO Sandy Weill. Her achievements earned her two Fortune covers – “The Last Honest Analyst” and “Can Sallie Save Citi?” – as well as leading to her being consistently ranked her among the most powerful women in the world by a number of business publications.

“She joined the banking industry as a research analyst, but quickly rose through the ranks, gaining a reputation for honesty and integrity. Dubbed ‘Mrs. Clean’ of Wall Street and the ‘Last Honest Analyst’, Ms. Krawcheck was credited with restoring investors’ faith in analyst reports, while head of retail broker firm Smith Barney.” [1] (CNN-12-20-07)

“Led by Sallie Krawcheck, the wealth management unit has been highly profitable, fast-growing and seemingly immune to the woes afflicting other parts of the company. Citigroup Chief Executive Vikram Pandit, hailed the unit as ‘one of Citi’s finest.’” [2] (Wall Street Journal – 4-19-08)

Krawcheck started her career at Sanford Bernstein as a research analyst covering financial services stocks. She was ranked # 1 by “Institutional Investor” in her field during every year she worked as an analyst. Promoted to Director of Research and then CEO of Bernstein, she bucked the Wall Street tide of tying research to investment banking and called the Internet bubble unsustainable. While the significant investments made in value-based research were controversial at the time, they paid off strongly when the stock market bubble burst.

This led Sandy Weill to bring her to Citigroup in October 2002 as Chairman & Chief Executive Officer of Smith Barney during the height of the research conflict-of-interest scandals, as its parent company struggled with the fall-out from Elliot Spitzer’s investigation of the company’s role. She separated research from the influence of the investment bank, and in doing so significantly improved research recommendation performance. Under her leadership, Smith Barney research consistently outperformed its competitors and was named # one several years running as the “Most Award-Winning Broker” on the Forbes.com research performance survey and StarMine’s annual surveys of analyst performance in North America. [3] (Business Wire – 05-12-05)

In addition, she championed the move at Smith Barney from the traditional brokerage model to wealth management, leading in the advisory business through the development of the Smith Barney Advisor product (nearly $40 billion in assets), the fastest-growing product in Smith Barney’s history.

“When she was brought in to run Smith Barney back in 2002, Sallie Krawcheck was heralded as a savior – the single best person possible to buff Smith Barney’s tarnished reputation. And sure enough, she met the challenge. By late 2004, Krawcheck was credited with helping raise rep productivity and morale.” [4] (Registered Rep – 03-01-07)

“In less than two years, Krawcheck has directed a restructuring of Citigroup’s maligned research department that trimmed the ranks, brought in new talent, and lifted the firm’s stock-picking accuracy to the top of the charts.” [5] (Investment Dealers’ Digest – 08-09-04)

“By most accounts, Krawcheck did a great job as CEO of Smith Barney: Broker morale improved and so did broker production. Krawcheck’s biggest achievement during her two-year tenure, according to advisors, was to restructure the research department, untethering analysts’ compensation from the investment banking unit’s performance. She also simplified the equity ratings structure to simple buy, hold or sell.” [6] (Registered Rep – 12-01-04)

In 2004, Sallie was appointed Chief Financial Officer & Head of Strategy for Citigroup Inc. For the next three years, she oversaw financial reporting, treasury, tax, investor relations, mergers and acquisitions, and strategic planning for the firm. She initiated a rigorous capital allocation process and created “best in class” finance systems. In efforts to streamline the company, she successfully sold Citi Asset Management and Travelers Life Insurance. Her efforts and overall leadership improved transparency of financial results and reporting. As a result, Institutional Investor named her one of the top three CFOs in the financial services industry, and she was also recognized in the role by “US Banker” magazine.

In 2007, Krawcheck was named CEO in charge of Citi’s wealth management business, which included returning to Smith Barney and adding the Citi Private Bank. At the time of her arrival, the Private Bank had been thrown out of Japan for sales practice issues; this, combined with continuing Citi regulatory issues, resulted in financial advisor attrition that was at an all-time high. After successfully merging Smith Barney with Citi’s Private Bank, she worked to change the corporate culture for Smith Barney’s financial advisors by overhauling the advisor pay program to create the number one advisor pay program on Wall Street, resulting in reduced advisor attrition and increased productivity. “There is a renewed confidence that we have leadership that is truly interested in the long-term being of the firm,” says one branch manager.

According to Roger Coleman, Smith Barney’s number three broker, “I have been courted by many, many brokerage firms. And despite all of what has gone on, I’ve happily stayed. I believe they really want to get this right. There is a tremendous amount of optimism in the air.” [7] (Registered Rep – 10-1-07)

Krawcheck and her management team were named the top wealth management team in the industry by “US Banker” magazine. The Citi Private Bank was named by “Euromoney” as the top private bank in the US and # 2 in the world.

Krawcheck's remuneration package in 2007 was roughly $11 million. [http://business.timesonline.co.uk/tol/business/movers_and_shakers/executive_movers/article4805924.ece]

Smith Barney in 2008 was named a top-20 “Customer Service Champ.”

Krawcheck is expected to leave the company at the end of the year, the Wall Street Journal reported Monday, September 22, 2008, citing people familiar with the matter. The timing of her departure is not certain, and she does not have another job lined up, the newspaper reported. The move follows months of tension with Chief Executive Vikram Pandit, and is part of a broader corporate restructuring at Citigroup, and the company plans to put the wealth-management unit under the umbrella of the institutional clients group in an effort to improve synergies between the two divisions, according to the Journal. [http://online.wsj.com/article/SB122210197683663279.html?mod=special_page_campaign2008_mostpop] Krawcheck was reportedly concerned about the conflicts created from mixing the retail business with the institutional side, and pushed for maintaining a true open architecture platform as the firm looks to expand sales of its own alternative investments. Sallie has 5 neices. Elenor, Anne, Emma, Tyler,Sara Louis,and Jack. She has three siblings Elizibeth who is a trust officer for wachovia, Kenny who is a lawyer,and Johhny who is a lawyer. Her Father Lenny Krawcheck is a lawyer,and her mother is Townie Krawcheck who was a lab technition. [http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080928/REG/309299971]

Recognitions

*2002-07 Fortune “World’s Most Powerful Women in Business”
*2002 Time Magazine “Global Business Influentials”
*2003 Fortune “Most Influential Person Under the Age of 40”
*2004 Wall Street Journal “Top 50 Women to Watch”
*2005 Forbes ranked #7 “World’s 100 Most Powerful Women”
*2006 Forbes ranked #6 “World’s 100 Most Powerful Women”
*2007 CNBC “Business Leader of the Future Award”
*2008 BusinessWeek Smith Barney ranked top 20 “Customer Service Champs”

Professional Board Positions

*Dell Inc.
*Carnegie Hall
*SIFMA – Securities Industry and Financial Markets Association
*Board of Overseers of Columbia Business School
*Board of Trustees – The Economic Club of New York
*Board of Trustees – The University of North Carolina Foundations

Early life

Krawcheck is a native of Charleston, South Carolina. She attended the University of North Carolina at Chapel Hill on the Morehead Scholarship and graduated in 1987 with academic honors and a Bachelor of Arts. In 1992, she received a Master of Business Administration from Columbia University. As an active participant in the affairs of her alma maters, Krawcheck has endowed her former secondary school, The Porter-Gaud School, with the Krawcheck Scholarship, a needs-based scholarship awarding full tuition to students of exceptional aptitude. She is a member of the Board of Directors of The University of North Carolina at Chapel Hill Foundations, Inc.

References

1. “Face Time with Sallie Krawcheck” – CNN-TV – 12-20-07 [http://edition.cnn.com/2007/BUSINESS/12/20/krawcheck2.interview/index.html]

2. “Citigroup Posts $5.1 Billion Loss” – Wall Street Journal – 04-19-08 [http://online.wsj.com/article/SB120849956809125759.html]

3. “Citigroup Smith Barney’s U.S. Equity Research Named Top ‘Award-Winning Broker’ by Forbes.com and StarMine – Business Wire – 05-12-05 www.forbes.com/bestanalysts

4. “Sallie’s Back” – Registered Rep – 03-01-07 [http://www.registeredrep.com/mag/finance_sallies_back/index.html]

5. Sallie’s Clean Sweep” – Investment Dealers’ Digest – 08-09-04

6. “Sallie Krawcheck Has Left the Building” – Registered Rep – 12-01-04 [http://www.registeredrep.com/mag/finance_sallie_krawcheck/index.html]

7. “A Sweeter Deal” – Registered Rep – 10-01-07 [http://registeredrep.com/advisorland/career/finance_swiss_barney_financial_advisors/index.html]

External links

* [http://www.citigroup.com/citigroup/press/2002/021030a.htm "Sallie L. Krawcheck to Become Chairman and CEO of New Independent Citigroup Business Providing Equity Research and Private Client Brokerage Services" (press release)] , "Citigroup Inc.", October 30, 2002.
* [http://www.moreheadfoundation.org/alumni/krawcheck.html Profile of Sallie Krawcheck by The John Motley Morehead Foundation]