Source: Bank of America Corp.
Source: Bank of America Corp.
When Bank of America Corp. recently increased their next class of senior managers, one name was strikingly absent: Fab Gallo.
Min were allowed to bet against the division’s marathon-running head of global equities, especially after setting a turnover record amid the messiest markets in a generation earlier this year. Yet after a leaked recording of a conference post sent Gallo’s dull style of communication into the public eye, and turbulence erupted in parts of his business, the bank’s boss left him behind.
While eight colleagues were invited to join the company’s elite management team in late July, Gallo was tasked with sharing responsibilities with a former subordinate.
The snub has drawn attention across Wall Street, and turned a spotlight on an executor known for pushing subordinates particularly hard. It has since prompted discussions between him and senior executives about how long he will stay at the investment bank, according to people familiar with the situation who asked not to be appointed for discussing staff. Another solution could still be found.
Gallo, 54, referred messages to a company spokeswoman who declined to comment.
The trade veteran was ousted when Bank of America unveiled a series of promotions and added executives to its most senior decision-making body. New members of the panel include his longtime counterpart who oversees fixed income markets, Jim Demare, who rose to head the global division for sales and trade. One of Gallo’s subordinates, Soofian Zuberi, was promoted to run the stock company next to him together.
‘Great job’
It marked a rapid change in fortunes for the veteran of the sector whose operations were credited with growing to unusual challenges posed by the coronavirus pandemic in March, when traders were forced to work from home just as markets went into a nostril.
At the end of the first quarter, the stock-trading division’s turnover jumped 39% to a record high. In May, Chief Executive Officer Brian Moynihan praised Gallo for the ‘great job’ he did alongside fixed-income Chiefs Demare and Bernie Mensah, who was also honored to join the management team. In the second quarter, share income increased 7%, driven by cash and client financing.
However, there were also bumps. In April, someone leaked a recording of a controversial conference petition to media, including CNBC and the New York Times. Gallo could then be heard saying that “critical” workers could not stay too long in the office pandemic. The bank said at the time that the talk was about bringing people back to the office, once officials deem it safe, and that the company “saves no cost or savings to take care of our people.”
Then, in a second-quarter submission, the bank flagged “weaker trading performance” in the unit’s derivatives business. Although that company grew versus the previous year, it lost more than $ 100 million to some positions held in Europe, the Middle East and Africa, according to people with knowledge of the business. The company’s broader European company has seen a series of shakeups, after which Martina Slowey was recently appointed to run shares for EMEA, replacing Julien Bahurel, who will leave after a transition period. This follows the June departure of Andrew Mitchell, head of equities in the region.
Frustrating managers
Gallo, whose full first name is Fabrizio and runs through Fab, is known to frustrate his managers with a dominant style, and is deeply involved in actions and personnel decisions among him, according to bank employees. This includes intervening in reviews for members of commercial banks, sometimes overriding assessments drawn up by the managers under him.
A gruesome reader, he cuts the image of a cultural intellect. He is also seen as arrogant. Colleagues say Gallo has erupted in moments of frustration over the years at subordinates, calling her dumb. That and his blunt communication style have created detractors within the division, accusing him of unnecessary scratching.
Some Bank of America employees also took umbrellas during Gallo’s leaked recording. On it, he could tell staff that if they want to hold critical roles, they will have to “make a decision” about returning to the office, CNBC reported in April.
“We can not provide fair and orderly markets if 99% of the population decides not to to feel nice, ”Gallo said on the recording. “You can not say on the one hand that you can not trust the company and on the other hand get the money from the company, for a long period if you are in a critical position. Now if people decide they don’t want to be in a critical position, we can have that conversation too. ”
Image of the bank
The remarks came amid a debate in many Wall Street companies over who could stay home and for how long. However, those words did not quite resonate with Bank of America’s efforts to rebuild its public image as a good corporate citizen after the 2008 financial crisis. Moynihan has been a prominent voice of the business community during the pandemic, and is committed to supporting staff through difficult times and resistance to reduction of key figures. He also highlighted the activities of rewarding lenders, their participation in the government’s small business rescue funding program and a $ 1 billion pledge to color communities over four years.
Gallo joined the bank in 2011 from hedge fund Brevan Howard Asset Management LLP and also spent more than a decade with Morgan Stanley, he served as head of equities and global proprietary trading.
Despite his senior role, he maintains a relatively low profile. One of the few public references to Gallo is at the University of Chicago, where there is a bedroom named after him. He contributes to financial aid and career programs.
His nearly decade-long run as sole shareholder was notable for his tenure in a sector where co-chiefs are often the norm, forcing operators to compete and leave companies with leadership options if companies do not perform. Before the final management shot, Gallo reported to the bank’s chief executive Tom Montag, who is also president of its global banking and markets unit. If Gallo stays after the promotions, he will report to Demare.
– With the help of Gillian Tan, and Ruth David
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