Why John Thain and Stan O’Neal Are Rich And You Aren’t


John Thain and Stan O’Neal rose rapidly through Wall Street’s hierarchy because they were excellent at managing their relationships with their superiors and boards of directors. Unfortunately, both were cold and distant with their peers and underlings, factors which may have contributed to their downfall. But who cares? They got filthy rich and stayed that way even after their alleged downfall.

Those are the conclusions of Dr. Robert Hogan, a psychologist who specialises in interpersonal relationships. Unlike the psychological tradition inaugurated by Sigmund Freud, Hogan’s brand of psychology isn’t so interested in ‘self-awareness’ as a key to personal success. Rather it focuses on how people relate to those around them.

Hogan says writes that O’Neal and Thain both had a social skills that were very good for their personal careers.


They are both talented and good with numbers and cost control; they are both arrogant, cold, and remote. But most importantly, both of them were superb at managing relations with their superiors (especially the board), while ignoring relations with subordinates. Such people, when they are talented, rise rapidly in organisations. They have great individual careers, but their damaged relationships with their subordinates inevitably undermine their leadership.

Hogan’s conclusion is is kind of fluffy. Sure O’Neal and Thain’s leadership was undermined, but only after they had been paid tens of millions of dollars based on their ability to get directors to agree they were very valuable. That’s not such a bad deal.

What we take away from this analysis is that Thain and O’Neal’s personality amounts to a kind of agency cost: boards of directors choose people who they like although those people are dismissive of the interests of subordinates, which may actually have included shareholders.  Maybe boards should start assessing CEOs on a “plays well with others” basis.