Looking for a cushy job with great pay and low responsibility? Be a bank CEO!
Here’s how it works:
* Take job after an economic downturn, when your predecessor is forced out after presiding over the loss of billions in bad-debt and trading write-offs (don’t worry, your predecessor won’t starve in retirement).
* Immediately take huge additional write-offs and reserves and blame them on your predecessor. Clean up balance sheet so your performance bar is so low you could fall over it.
* Announce “new era” in which Your Bank will focus on conservative, fee- and spread-based businesses in which you will grow steadily and prudently.
* Sit in your chair for two years while economic recovery (and your earlier write-offs) deliver strong earnings to the bottom line.
* Smile for the cameras. Have PR people place Fortune cover story entitled “The Wizard Who Turned Around [Your Bank”]
* Renegotiate contract extension from position of strength. Include new provisions that tie your comp directly to earnings and stock performance.
* Announce that, given the huge opportunities in the markets, Your Bank will take a bit more risk (prudent, of course) to improve return on equity.
* Encourage your traders to make huge bets.
* Sit in your chair for three years and collect at least $50 million a year during rest of bull market while those bets pay off.
* When market finally turns (sorry, it always does), briefly deny that the downturn will affect Your Bank.
* When it’s clear that your traders were just bull-market geniuses and have gambled away all the “profits” Your Bank booked in the previous three years and more, blame them and express disappointment. Then hang around to see whether market cares.
* If market demands resignation, resign, collect $500 million severance, and join private equity firm.
* If market yawns, re-up for another cycle and do it all over again!
See Also: Time For Lousy Bank CEOs To Step Down
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