Banking on hypocrisy and other useless advice

“Rock Star Banker Touts Development,” trumpeted the fawning headline in the October 18, 2012 Halifax Chronicle Herald. “Banker Bob Ready to go Back to Work,” chimed in the online business journal

Why the fuss?

Robert Kelly, a local boy who had made very, very good in the United States of America—the 1975 Saint Mary’s University BComm grad had parlayed his beginnings as a Halifax accountant into the pinnacle of bankerly success as CEO of Bank of New York Mellon, America’s eighth largest bank by assets—had returned for a visit to his home town to instruct the locals in the fine art of ” how to increase economic and job growth in Nova Scotia.”

His talk, organized by the Greater Halifax Partnership, a local regional developmentpromoting agency, attracted several hundred of the city’s corporate movers and shakers.

They applauded as wildly as corporate decorum allowed while Banker Bob extolled the virtues of unfettering urban development—”I like view planes, but I prefer jobs”—lowering personal income taxes, getting government out of the lucrative liquor business and, of course, gutting those pesky trade unions.

“Employees,” he told his audience of the already converted, “enjoy a lot of rights today versus years ago.”

Hold that thought. We’ll return to it.

After noting that 22 of the 50 American states have become right-to-work states, “there’s quite a bit of evidence,” Banker Bob said, providing none, “that you tend to have higher job growth, higher economic growth and the state budgets tend to be better managed in the… so-called right-to-work states.” If Nova Scotia followed suit, he said, it would “send a huge message… that Nova Scotia is thinking differently, is pro-growth (and) probusiness.”

Let us pause for a moment to consider that which both the Herald and managed to skirt—Banker Bob’s own less than stellar recent employment track record.

During his five years at the helm of BNY Mellon, Kelly managed to terminally alienate its board with his often high-handed management style. He negotiated behind their backs to take another more lucrative job and then fibbed about it when word leaked out; ticked off one of the bank’s biggest clients by poaching its top employee “with an overthe- top compensation package;” not only failed to improve the bank’s “management bench strength” but also drove away a number of potential successors; talked “incessantly about his desire to move to an expensive ultramodern headquarters” at a point, in the post-financial-meltdown world, when the board “didn’t feel it was a good time to spend a lot of money on relocation;” and, perhaps worst, failed to “control the rising expenses that were eating into profits.”

On the morning of August 30, 2011, according to a lengthy report by Fortune Magazine into what it called “the fall of a superstar banker,” members of BNY Mellon’s board marched into Kelly’s office and told him to leave. They’d “lost confidence in him to the point where he had to resign or be fired.”

One might have thought Kelly would have been required to suffer for such sins. But in Kelly’s corporate America, where top employees at least “enjoy a lot of rights today versus years ago,” Bob made out like a bandit.

In fact, in December 2010, eight months before his firing, the board had even rewarded what the magazine described as Kelly’s “extremely critical” performance evaluations by the bank’s independent directors with a $5.6 million bonus! When they finally showed him the door eight months later, Banker Bob walked away with a severance and benefits package worth an additional $34 million.

His bank’s employees didn’t fare so well. Three week’s before his own firing, Kelly laid off 1,500 employees, or three per cent of the bank’s workforce—ironically at a time when, according to an Associated Press report, its profits were improving.

Perhaps he fired them because, in Banker Bob’s words, “in today’s world where you’re competing against kids in India or China or in Brazil, you’ve got to build every competitive advantage you can have without creating artificial barriers to more hiring. So I’d like to think in the U.S. and Canada now we have all the protections we need to protect employees.”

Banker Bob certainly does. Having been a member in good standing of the financial class whose reckless speculation led to the global financial meltdown, he boasts he performed his year of personal post-firing penance by enjoying three luxury cruises and a European bike tour while flitting among his $14.7 million, 6,400-square-foot Manhattan townhouse, his North Carolina lake house and his downtown Halifax condo.

And, of course, giving out free advice to his home province on “how to increase economic and job growth.” How nice. For him.

4 Comments to “Banking on hypocrisy and other useless advice”

  1. Thanks so much for this. In a very short space you managed to remind us that Kelly’s kind of “success” so often comes at a price to many people who have no safety nets of the kind that he has. This really was well written and researched and a gift to those of us who kind of know that there is something wrong with the picture the Chron. Her. gave us in this case but can’t usually say more than that. We are now a little better armed.
    Steve Hart

  2. As a journalist in the 1980s in Nova Scotia, it is good to see that Stephen Kimber is still engaging in the ‘rock ’em and sock ’em’ style of truth-telling journalism that the province still badly needs (as I learned upon a September 2012 visit.)

    Alan Story
    Nottingham, United Kingdom.

  3. Avatar .Cliff White // January 11, 2013 at 4:26 pm // Reply

    This is a wonderful piece and in keeping with much of your work over the years. It’s interesting to see who the business establishment considers a source of useful economic advice. One can’t help wondering just how much tax Mr. Kelly paid on his millions. There is a reason why our economies are on shaky ground I deficits are growing and our public services are shrinking. Its men like Kelly and their acolytes

  4. Avatar Martin Lloyd // March 11, 2013 at 2:02 pm // Reply

    Kudos to Mr Kimber for your excellent article, you may want to take a look at todays CBC news story regarding Shaw broke employment law.

Leave a comment

Your email address will not be published.