Turning Around ING

Financial giant ING was in trouble in 2008 with a fourth quarter loss of €3.3 billion. Just how bad was it? It had to draw £22bn of government money to stay alive.  It already had in place a plan to enter Japan which had to be shelved. ING was also going to lay off 7,000 workers.

It was under these conditions that Jan Hommen became the CEO of one of the largest banking and insurance group in the world, ING.  Given the fact that he had only been with the company for around 4 years some were a bit skeptical with his appointment. It didn’t help that prior to joining ING he didn’t actually work at another financial institution but with companies in the heavy industry and electronics. He had previously been working with Alcoa and then at Philips Electronics.

He took on the job through and he acted quickly. There were three main tasks that had to be done as he later stated: correct and strengthen the financials, reduce the number of business interests and reinforce franchises in the company’s core markets.  Moving decisively, he acted to have the group exit from 10 of the 45 countries it operated in. The goal was to become a bank focused on Europe once again while keeping some smaller operations in strategically global locations.

The results of the changes led to a net loss of only €712 million for the first three months of 2009 as compared to a loss of €3.7 billion in the same quarter of 2008.  The banking division also recorded a profit of €132 million as compared to a €1.84 billion loss in the same quarter of 2008.

Other changes included the restructuring of the management team of the insurance division and partial sale of some assets.  All in all Hommen’s reforms have helped ING get back on its feet. There are fewer doubters now that he has shown result. Hommen became chairman of the Supervisory Board on January 2008.  His current positions are CEO, chairman Executive Board ING Group, Management Board Banking, and Management Board Insurance.

When the going got tough for ING they were fortunate to have leader who acted quickly and decisively.

A Trillion Dollar Responsibility

Heading a multimillion dollar business is already a lot of responsibility so you can imagine what kind of responsibility (and pressure) is involved in handling over a billion dollars worth of assets.  There are very few people in the world doing that and one of the few is Kathleen Murphy. She is the president of Fidelity Personal Investing.  This enterprise offers retail brokerage, managed accounts, annuities, mutual funds as well as other financial products and services to individual investors that number in the millions.

Aside from this Kathleen is also responsible for the annuities and life insurance business of Fidelity. This includes workplace savings business for tax exempt organizations, the entire advertising and brand programs of Fidelity as well as online strategies of Fidelity via Fidelity.com.

Among Kathleen’s outsized achievements was increasing last year’s customer account from 12.7 million in 2010 to 13.5 million in 2011. Under her watch assets under management increased to $1.1 trillion.

Before joining Fidelity Kathleen was the CEO of ING U.S. Wealth Management.  Kathleen who is a 25 year industry veteran began her career at Aetna where she stayed for 15 years.  She has always been an achiever.  In 1984, Kathleen graduated summa cum laude with a B.A. degree in economics and political science from Fairfield University. She finished her juris doctorate from the University of Connecticut in 1987 with highest honors. 

A Huge Role

Banks nowadays have many capabilities. It can make international transactions and billions of profits are made all done electronically. Many people still associate banks with the brick and mortar branches that they’ve had for ages.  In fact many people will associate the strength of the bank with the number of bank branches they see.  Branch banking may be the old way of doing banking but it is still a big chunk of the business and will continue to do so.
 
Any person who is in charge of handling the branches of a huge bank belongs to the elite crops of managers. This person is literally in charge of the face of the bank. The branches are the front liners of the bank. For banking giant Wells Fargo, it has Carrie L. Tolstedt heading its Community Banking division.  She is thus responsible for retail, small business and business banking.

On its own the division she heads would be a huge company. It serves 22 million retail banking households with its more than 104,000 employees. It also caters to 2.5 million small business and business banking households. This unit has more than 6,200 retail banking stores and more than 12,000 ATM in 39 states and the District of Columbia to serve its customers.

Carrie can be considered a bank insider. She started her career in 1986 joining Norwest Bank in Nebraska.  Carrie joined another company FirstMerit Corporation then opted to rejoin Norwest.  Norwest merged with Wells Fargo in 1998. The merger did not slow down Carrie’s rise in the new organization; she eventually became the Central California regional president of Wells Fargo in 2001. From there it has been steady rise to positions of more responsibilities.

Her ascent at Wells Fargo has not gone unnoticed. In 2010 U.S. Banker magazine listed her as among the “25 Most Powerful Women in Banking”, and she held the number one spot. Carrie earned her B.S. degree in Business Administration at the University of Nebraska and finished the Pacific Coast Banking School at University of Washington.

The REIT Master

The real estate industry was severely affected during the 2008 financial crisis. Many companies no longer had access to credit and witnessed their own demise.  Ventas though was another story. The company’s chairman and CEO Debra Cafaro deftly guided the company through the crisis. Ventas has come out even stronger.

Ventas is a publicly traded seniors housing and health care real estate trust (REIT). It had been on an acquisition binge prior to mid-2007. Cafaro saw that there was trouble in the horizon and asked her senior managers to become defensive in nature. This totally shocked them as the only thing they knew was to grow, grow, and grow.

While her company’s stock price was high, Cafaro wisely raised equity and refinanced debt. When the financial crisis hit the company had a solid balance sheet and strong cash position.  Despite the crises and low stock prices she was also able to raise several hundred million dollars in equity and debt during the first half of 2009. This was outstanding considering the fact that there were companies who had little or no access to capital.

The following months saw Ventas lead the REIT sector as the market began to recover.  Ventas which is an S&P 500 company is now one of the leading seniors housing and healthcare REIT in the U.S. It has a well diversified portfolio of over 1,400 seniors housing and healthcare properties in 46 states, the District of Columbia and two Canadian provinces.

As to its financial performance, from 2001-2011 its compound annual total shareholder return of 23.4% greatly outpaced both the healthcare REIT and the overall REIT indexes. Much of the credit goes to Cafaro with her mastery of the real estate and REIT markets.

Chevron’s Company Man

John S. Watson is the chairman and CEO of energy giant Chevron Corp. He has held this position since January 1, 2010. While many companies search for high caliber executives to run their firm, Watson has been with Chevron for almost 32 years.  In fact he began his career at Chevron in 1980 and hasn’t worked for any other company.  Watson is a company man.

The advantage of having a company man run the firm is he doesn’t have to familiarize himself with the entity. This saves time and he can immediately go about instituting improvements. Another advantage of having a company man is he is a source of inspiration for others in the company that they too have a chance of being CEO. It’s good for a company’s morale.

Born in California in 1956, Watson received a bachelor’s degree in agricultural economics from the University of California, Davis in 1978. He then followed this up with an MBA from the University of Chicago in 1980.

After getting his master’s degree he has been with Chevron ever since. His first job at Chevron was as a financial analyst. Watson then held a number of financial and analytical positions in Chevron and Chevron U.S.A. Inc.  (CUSA). He went on to hold supervisory positions in the comptroller’s financial and profit analysis groups.

By 1996, Watson became president of Chevron Canada Limited. His rise in critical positions then happened in relatively fast successions. In 1998, he was elected a vice president of the corporation being responsible for strategic planning, mergers and acquisitions. Watson led the company’s integration effort after the Chevron-Texaco merger in 2000 and was then appointed chief financial officer.

He became the president of Chevron International Exploration and Production Company in 2005. The year 2008 saw Watson appointed as executive vice president for strategy and development.  He became the vice chairman of the board from 2009 to 2010 and then became the chairman and CEO.

The company Watson heads is truly global and huge. Chevron produced 2.673 million barrels of oil-equivalent per day in 2011. Around 75 percent of that production happened outside the U.S.  Its global refining capacity in 2011 was at 1.96 million barrels of oil per day.

 

Managing A Trillion Dollar Business

There are not many people in this planet who manage multi-billion dollars businesses. Fewer still are those who handle trillion dollar companies. One of the few who does is Mary Callahan Erdoes. She is the CEO of J.P. Morgan Asset Management.

This enterprise oversees around $1.3 trillion in assets. Mary is head of the fifth largest asset management company in the world. This also includes the second largest hedge funds as well as America’s most prominent private bank that caters to the ultrawealthy as well as more than 200 other investment classes.  She made her mark early; on her fist year on the job revenue reached $9 billion and profits rose 20% to $1.7 billion.

Mary is known for her hard work and competitiveness. She works in an industry known for its toughness and she has come out with good deals for her company. Among the positions she handled was heading private bank where client base increase 15% a year and assets growing by $238 billion. This got the notice of the top brass who asked her to head the asset management division.

Mary finished her bachelor’s degree at Georgetown University, majoring in Mathematics and was the only female to complete as a Math major at Georgetown at that time. She then went to obtain an MBA degree at Harvard Business School.

Mary worked for other financial companies before she joined J.P. Morgan Asset Management as head of fixed income for high-net-worth individuals, foundations and endowments.  Less than 10 years later she became CEO of J.P. Morgan Private Bank.  In 2009 she was appointed CEO of the Asset Management division.

Aside from heading a trillion dollar business Mary is raising 3 kids with her husband.

Not Everyone’s Friend

Luis C. Camilleri has a job the many ambitious executive would want to have, being the chairman and CEO of a large multinational company. Yet this company is not a friend to everyone which means it has a lot of detractors. The company we are talking about is Phillip Morris. This is the largest tobacco company in the world if one does not include the state-controlled China National Tobacco. It’s most popular brand is Marlboro.

The tobacco business is quite profitable with more than 1 billion tobacco users in the world based on facts from the World Health Organization.  According to the U.S. Public Health Service around 45% of U.S. smokers try to quit each year with only 4% to 7% of them able to do so.

The company does admit that tobacco products are addictive and harmful. They like to point out though that the company has been following regulations and that they are a legitimate business and not operating underground. 

Many executives would perhaps want to work in a company with a better public image. For Luis Camilleri though he hasn’t had any other job since joining the Philip Morris. Camilleri can be described as an international citizen. He was born in Alexandria, Egypt in 1955 but his family comes from Malta.

Since age 9 Camilleri had attended British boarding schools. He is fluent in English, French, Italian, and a bit of German.  In 1976, Camilleri obtained a degree in Economics and Business Administration from Lausanne University in Switzerland.

Camilleri’s first job was as a business analyst with W.R. Grace & Company in Lausanne. He then joined Philip Morris International Inc. in 1978 as a business development analyst with Philip Morris Europe. Camilleri rose through the corporate ranks being promoted to positions of higher responsibilities. He played a big role in developing the emerging markets of Eastern Europe.

Camilleri had been chairman of Kraft Foods from 2002 to 2007 and chairman and CEO of Altria Group since 2002. He became the chairman and CEO of Philip Morris International on March 2008 after the company was spun off from Altria Group, Inc.

Given the negative image of the tobacco industry in general Camilleri plays a challenging role in helping to manage the perception of the industry.  He has been up to the task and his company has also been making handsome profits.

Working Her Way To The Top

Deirdre Connelly was born San Juan, Puerto Rico in 1960 to an Irish-American father and a Puerto Rican mother. She spent the first 18 years of her life in San Juan before she headed for mainland U.S.A. to study and graduated with a bachelor’s degree in economics and marketing from Lycoming College in Pennsylvania in 1983.

That same year Deirdre joined Lilly as a sales representative and started her upward trajectory in the pharmaceutical corporate world. She moved to San Juan a year later in 1984 as a marketing associate. Deirdre then progressed through higher positions in the sales and marketing area. In 1995, she became general manager for Eli Lilly Puerto Rico, SA.

More promotions followed then in 2005 Deirdre became the President of US operations. This was a high point in her career but it was just the beginning of a new chapter. GlaxoSmithKline (GSK) was interested in her and she joined the company in February 2009 as President, North America Pharmaceuticals.  This was a huge responsibility given that GSK is a British multinational company. She is basically the right-hand person in the U.S. to GSK’s CEO.

While Deirdre is the first woman to hold the position she does not feel any discomfort and believes there will even be more diversity (including nationality) at GSK given its own diverse customers. 

Recently GSK bought Human Genome Sciences for $3.6 billion. Using human genome data to help produce curing drugs has always been a challenging yet potentially rewarding combination. Deirdre has been appointed as president and CEO to lead this company.

Leading A Successful Spin-off

There could be a host of reasons why a unit of a company is spun-off and this unit has to fend for itself. Ameriprise Financial, Inc. was spun-off from American Express in 2005. Today Ameriprise is one of the largest diversified financial services company in the U.S and a member of the Fortune 500.

The man who has led this successful spin-off is James M. Cracchiolo who sits as chairman and CEO of the company. There are many challenges facing a company when it becomes independent. One of them is brand awareness.  Brand awareness was one of the top concerns of Cracchiolo and he believes the company has successfully created its own brand which has helped it to stand on its own.

The strength and soundness of the company that Cracchiolo leads was proven in 2008 when Ameriprise declined around $2.5 billion in federal bailout money offered to it as part of the Troubled Asset Relief Program of the U.S. government during the subprime mortgage crisis.

Ameriprise serves the financial planning requirements of the mass affluent and the affluent. Under Cracchiolo’s stewardship the company acquired Columbia Management’s long-term asset management business from Bank of America Corp. for $1.2 billion in May 2010. This deal made Ameriprise the eight-largest manager of long-term mutual funds in the U.S.  He has also been leading the company’s foray into India.

Cracchiolo was born in 1958 and earned both his bachelor’s degree in accounting and economics and master’s of business administration degree in finance from New York University Stern School of Business. He is also a licensed CPA in New York State.

Before leading Ameriprise to the path of independence Cracchiolo was an American Express insider having been executive vice president and CFO of Shearson Lehman Brothers from 1990 to 1993 when it was a unit of American Express.  He then became senior vice president of TRS Quality, Global Reengineering from 1993 to 1997. Cracchiolo rose through several more senior positions until his last post as Group President of American Global Financial Services from 2000 to 2005. Since 2003 he has also been the Chairman of Threadneedle Asset Management Limited.

On the socio-civic side Cracchiolo serves on the Board of Advisors to the March of Dimes Foundation.