Former Bank Executive: Women, Ask For A Raise!
It's not an exaggeration to say most of America's financial sector is run by men. In the securities and investment banking industries, men hold more than 80 percent of executive positions. And women hold only 17 percent of the board seats on Fortune 500 companies.
Sallie Krawcheck bucked the odds.
As former president of global wealth and investment management for Bank of America, she oversaw more than $2 trillion in assets. But corporate turnovers and personnel changes got her unceremoniously pushed out.
Wall Street lost one of its few women at the top when Krawcheck left, but she's not the only one. During the economic downturn, women lost finance jobs in greater numbers than men. And before that, women had been leaving the financial sector for several years.
Krawcheck is now on a mission to bring those numbers up. Last year, she took charge of 85 Broads, a women's network that's grown to include more than 30,000 members.
As part of Morning Edition's look at The Changing Lives of Women, Krawcheck tells David Greene about her new venture and urges women to negotiate more aggressively.
On bringing more women onto corporate boards
Women have been shown to be, on average, more risk averse [than men] ... to be longer-term in their outlook. In fact, I saw a recent piece of research that showed, on average, when men enter a negotiation, they're focused on coming out the other side winning. And when women enter a negotiation, they're more focused on coming out the other side with the relationship intact.
On the consequences of women not asking for money
What I've found over time is that when it would come to bonus time or raise time, I would hear from the gentlemen, "I want to make X." I don't think I ever heard from a woman who worked for me, "I want to make X." And research shows, men ask and women don't. ... Say we've got two employees, Joe and Joanne. They're both set to make $5 in bonus. Joe comes into my office and says, "Hey, Sallie, I've had a great year. I'd like to make $10 this year."
After Joe leaves, I call the head of HR, and we sort of say, "Can you believe this? Joe wants to make $10, he's in for $5, ha ha ha." But we don't want to lose him. So we put him in for $7. And that means Joanne isn't going to get the $5 we had planned. She's going to get $3. Because the bonus pool doesn't go up. She sees her bonus actually reduced.
On her women's professional network 85 Broads
These women have intuitively recognized the research that says the No. 1 unwritten rule of success in business is networking. Not schmoozing, but having access to information, knowing people. ... Stuff I want to know that can help me in business and life that my company isn't providing. We do online education seminars on things like: How do you ask for a raise? How do you get on a board? How do you pivot into public service?
And what is really interesting, the women who have joined our network have lower attrition rates from the workforce than the average for the professional woman. So there's something that's happening in the network by bringing together these like-minded individuals, that's helping these women in their careers.
DAVID GREENE, HOST:
America's financial sector is dominated by men. If we look at the securities and investment banking industries, fewer than one-in-five executive officers or managers is a woman. At Fortune 500 companies, women hold just 17 percent of the seats on boards. And of those 500 companies, only 23 have a female CEO.
STEVE INSKEEP, HOST:
So, the odds can be against women, but Sallie Krawcheck bucked the odds. She was president of global wealth and investment management for Bank of America, overseeing trillions of dollars in assets. Before that, she had a similar role at what was then Smith Barney. But corporate turnovers and personnel changes got her unceremoniously pushed out of both positions. So, Wall Street lost one of its few women at the top.
GREENE: As part of our series on women and wealth, we wanted to learn what this former CEO observed about gender and money on Wall Street. Krawcheck told us she often turns to research, which suggests that a diverse group tends to make different decisions than, for instance, a group of male, Ivy League educated quantitative analysts - or quants.
SALLIE KRAWCHECK: Those are smart people. But adding one more Ivy League educated math quant into a room, will that help a team be more efficient, be more productive, be more successful? And the answer's no. And so there is something inherent in diversity of thinking, of experience, and of background and of indeed, of skin color and of gender. There's something about that diversity that leads to innovation, better returns, lower risk. And for women in particular, a recent piece of research showed, on average, when men enter a negotiation, they're focused on coming out the other side winning. And when women enter a negotiation, they're more focused on coming out the other side with the relationship intact.
GREENE: Well, take me into a specific case.
KRAWCHECK: I will tell you my own story. Going into and during the downturn, I ran Smith Barney. We had as an institution sold our clients investment products that we firmly believed were low-risk. Well, it turned out they weren't. And that when the market cracked and crashed, these products - which were supposed to, in theory, go down a few cents on the dollar - went down most of their cents on the dollars. I took the stance, for which I lost my job, that we should partially reimburse our clients, and had a fight within the organization for it. We eventually did partially reimburse our clients but I was stripped of my responsibility. If you asked me at that point in time: Sallie, did you get fired because of you're a woman, I would say, what? You're kidding me. Absolutely not. And as I've started to say, my thinking in reviewing the research now is, well, maybe. You know, the research tells me these are characteristics and qualities that a woman exhibits and I was fired for it. So, look, what I can tell you is that that debate that we had within that company was a very healthy debate. We may or may not have come out to the right or wrong place, but having that clash of ideas where I had a perspective, other folks had a perspective, I think we all want that in business and we particularly want that on Wall Street.
GREENE: Has there ever been a really big, important financial deal that was brought together?
KRAWCHECK: I'm pausing. I cannot. Well, you know, look. We just haven't had enough women in senior roles on Wall Street overall, fewer women in the investment banking function, overall, as well.
GREENE: Sallie Krawcheck is trying to get more women into senior roles on Wall Street and in other industries. She's invested in a networking enterprise bringing together high-profile women in business. It's called 85 Broads. The name refers to the address of Goldman Sachs - 85 Broad Street in Manhattan. That's where the women who started the group worked in the late 1990s. Eighty-five Broads is considering a name change now that it has some 30,000 members in industries ranging from investment banking to marketing and law. We asked Sallie Krawcheck why women need this professional group.
KRAWCHECK: These women come together because they have intuitively recognized the research that says the number one unwritten rule of success in business is networking. Not the schmoozing networking, but the having information, knowing people. And I sort of think about it as stuff I want to know that can help me in business and life that my company isn't providing for me. So, we do online education seminars on things like how do you ask for a raise, how do you get on a board, how do you pivot into public service. And what is really interesting and what really spoke to me about the network is that the women who have joined our network have lower attrition rates from the work force, than the average for the professional woman. So, there's something that's happening in the network by bringing together these like-minded individuals, that's helping these women in their careers.
GREENE: You wrote, recently, that the best investment a woman can make is to ask for a raise.
KRAWCHECK: I did.
GREENE: And you sort of offered a case study about what happens when they don't make that investment. Walk me through that if you can.
KRAWCHECK: I've managed many people in my career. I've managed very diverse teams. And it's interesting, because what I've found over time is that when it would come to bonus time or raise time, I would hear from the gentlemen I want to make X. I don't think I ever heard from a woman who worked for me I want to make X.
KRAWCHECK: Ever, ever.
GREENE: That's pretty stunning.
KRAWCHECK: It is. And research shows men ask and women don't. So, we've got two employees. Let's call them Joe and Joanne. Right? And Joe and Joanne are both set to make $5 in bonus let's say. Now, Joe comes into my office and Joe says, hey Sallie, you know, I really I've had a great year, I'd like to make 10 this year. After Joe leaves, I call my head of HR, and we sort of say can you believe this? Joe wants to make 10, he's in for five, ha, ha, ha. Well, time goes by. It's time to put those numbers on the piece of paper. And we start to look and we say, look, we don't want to lose him. Let's put him in for seven. Right? OK. So, we've done that. Now, what does Joanne make?
GREENE: She gets the five.
KRAWCHECK: Wrong. She gets three. Because the bonus pool doesn't go up. Bonus pool is 10 - five and five. She didn't ask for anything. So, they're both in for five, he asks for 10; we give him seven.
GREENE: She sees her bonus actually reduced.
KRAWCHECK: That's exactly right.
GREENE: And what does this create over time if this goes on and women don't start asking for raises more often?
KRAWCHECK: Forget about over time, 'cause it's happening right now. What you hear and what the research shows is that gentlemen negotiate for their first job. Women do not negotiate from their first job and on. And I tell women there is no HR fairy godmother. There might be, but you better not count on it. And so you need to be very fact-based, very clear, just as the gentlemen are, what you're delivering and what your expectations are. If you're not, you're losing.
GREENE: Sallie Krawcheck is the head of soon-to-be-renamed 85 Broads, a global professional women's network. This has been a real pleasure. Thanks for talking to us.
KRAWCHECK: Oh, I've loved doing it. Thank you so much for having me. I appreciate it.
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GREENE: Now, we also asked Sallie Krawcheck to share a lesson that she's learned about money, and you can read her advice on NPR's She Works Tumblr. More from our series tomorrow. NPR's Planet Money takes a deeper look at how women fare when they negotiate for higher pay.
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GREENE: This is NPR News. Transcript provided by NPR, Copyright NPR.