Shortly before 8am today, just before the market announcement was made, Gail Kelly told the group executive team at Westpac that Brian Hartzer would be taking her job. There was a spontaneous standing ovation from those present.
A few hours later they were standing next to each other to talk to the media about the change.
She wore a white suit, pearls and has white hair. He looked the traditional banker with a dark suit, a white shirt and red tie. He has grey hair.
The superficial details point to two very different people, according to banking industry insiders.
“He’s very commercial, a great banker who’s fantastic with the numbers and very hard-nosed,” says one finance industry executive who’s worked with Hartzer.
Gail Kelly, on the other hand, is also good with the numbers but is a natural people-person who started at the bottom of banking as a teller after training and working as a Latin teacher.
The new CEO hasn’t been a teller. He came to banking from consulting and got his line management experience in the UK.
“Brian is just what you need in a bank,” the banking insider said. “But he’s just not that touchy-feely type like Gail, who is universally loved by everyone at Westpac.”
Hartzer, a retail banker who understands how digital will transform his industry, has had his eye on becoming the head of a major bank for some years.
He’s been considered for similar roles before, including at ANZ. At Westpac, he is known for his alignment with Kelly’s strategy, taking a leading role in driving her vision through the business.
He takes over in February next year but isn’t expected to make big immediate changes to the executive team at Westpac.
Certainly not as many changes as the outgoing Gail Kelly who, when she took the top job seven years ago, spilled half the senior executives at Australia’s oldest bank.
When Kelly, now aged 58, told the board of directors several months ago that she wanted to retire, the bank hired international search firms to see what talent was available in the world of banking.
The process, including an internal review of potential candidates, came back with Hartzer, a 47-year-old American-born Australian with 25 years experience. His accent is tempered by 15 years in Australia.
Hartzer’s resume reads like he’s been in training for leadership since he was born.
He went to Choate Rosemary Hall school in Connecticut, one of the eight best schools in America. The equivalent school in the UK would be Eton; in Australia it would The King’s School or Sydney Church Of England Grammar School.
He then went to Princeton University, an ivy league college, where he studied European history. His first job was at a consulting company, First Manhattan.
Hartzer will, at least initially, have a focus on developing people and the digital revolution in banking.
“Gail has built, as she said, an amazingly strong leadership team, a very strong one team culture,” Hartzer said today.
“A big priority for me is that we continue to invest in our people and the quality of our leadership so that we really have world class leaders who are developing other world class leaders.
“I am also committed to ensuring that Westpac becomes one of the world’s great service companies, not just great banks, and continuing to push the boundaries as we adopt digital technology.”
Digital payment services using new technologies are seen as a threat to traditional banking businesses.
Like all banks Westpac sees its customers increasingly using digital channels, and this year launching a revamped platform for online banking and new apps for the Apple and Android platforms.
Hartzer says his move to Westpac in 2012 was driven by the opportunity to work with Gail Kelly. He also received an $8.6 million sign-on bonus.
“I’ve had the benefit over thew last three years of seeing Gail up close, and seeing just what an incredible leader she is,” he said.
Hartzer has a passion for history from his time at Princeton. “The opportunity to lead Australia’s oldest bank and oldest company as we enter our third century is an amazing honour,” he said.
His first priority will be to maintain the the strengths of Westpac in its financial performance and its engagement with customers.
He currently looks after a large part of Westpac’s business which delivers about two-thirds of the bank’s $7.6 billion profit
As Chief Executive, Australian Financial Services, he is responsible for retail, business banking and wealth businesses. This includes Westpac’s retail and business banking, St George Bank and BT Financial.
His group, Australian Financial Services, has achieved compound earnings growth of 10% over three years.
Hartzer is seen as a supporter of Westpac’s strategy of maintaining separate identities for its St George, Bank of Melbourne, BankSA and RAMS businesses.
Before joining Westpac in 2012, he was Royal Bank of Scotland Chief Executive Officer, UK Retail, Wealth and Ulster Bank.
He has been a senior executive at ANZ, including its CEO, Australia, covering that bank’s domestic retail, commercial banking and wealth management businesses.
At the ANZ, he was considered in the running for the top job but this eventually went to current CEO Mike Smith.
Westpac chairman Lindsay Maxsted has spoken much of the close working relationship with Gail Kelly. He says he sees a similar bond with Hartzer.
Kelly said today: “I think we have made the perfect choice, the right person for the right role at this time. I am delighted that it was one of the key members of my own team.”
She says Hartzer has a clear sense and vision of the needs of customers and how technology is changing banking.
“Watch this space for what Westpac will do into the future,” she says.
The new CEO isn’t expected, at least at first, to get paid as much as Gail Kelly who is currently on a package of $12.8 million a year, making her the highest paid bank CEO in Australia.
Hartzer is currently on $3.4 million a year, made up of $2.25 million in base pay plus short term incentives.
Now Hartzer will get a long term incentive in the form of shares but Westpac has changed its policy on equity awards to make them a four-year plan instead of three.
This will mean it will take Hartzer longer to get the benefit of any share plan. The details of his equity package are not yet known. Other bank CEOs in Australia get packages around the $10 million mark.
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