|Bid||0.00 x 800|
|Ask||0.00 x 900|
|Day's range||26.99 - 27.13|
|52-week range||20.05 - 28.02|
|Beta (5Y monthly)||1.58|
|PE ratio (TTM)||13.06|
|Forward dividend & yield||1.50 (5.52%)|
|Ex-dividend date||30 Jul 2020|
|1y target est||N/A|
(Bloomberg) -- When Bank of America Corp. recently elevated its next class of senior executives, one name was conspicuously absent: Fab Gallo.Few would have bet against the marathon-running head of the firm’s global equities division, especially after he set a revenue record early this year amid the messiest markets in a generation. Yet after a leaked recording of a conference call thrust Gallo’s blunt communications style into the public, and turbulence emerged in parts of his business, the bank’s bosses left him behind.While eight colleagues got invited to join the firm’s elite management team in late July, Gallo was told to split duties with a former subordinate.The snub has drawn attention across Wall Street, turning a spotlight on an executive known for pushing subordinates especially hard. It has since prompted discussions between him and senior executives about how long he will remain at the investment bank, according to people familiar with the situation who asked not to be named discussing personnel. Another solution could still be found.Gallo, 54, referred messages to a company spokesperson who declined to comment.The trading veteran was passed over as Bank of America unveiled a series of promotions and added executives to its most senior decision-making body. New members of the panel include his longtime counterpart overseeing fixed-income markets, Jim Demare, who rose to head the global sales and trading division. One of Gallo’s subordinates, Soofian Zuberi, was promoted to jointly run the stock-trading business alongside him.‘Great Job’It marked a rapid change in fortunes for the industry veteran whose operations were credited with rising to unprecedented challenges posed by the coronavirus pandemic in March, when traders were forced to work from home just as markets went into a nose dive.By the end of the first quarter, the equities-trading division’s revenue jumped 39% to a record. In May, Chief Executive Officer Brian Moynihan praised Gallo for the “great job” he was doing alongside fixed-income chiefs Demare and Bernie Mensah, who also was elevated to join the management team. In the second quarter, equities revenue rose 7%, fueled by cash and client financing.Yet there were also bumps. In April, someone leaked a recording of a controversial conference call to media outlets including CNBC and the New York Times. On it, Gallo could be heard saying “critical” workers wouldn’t be able to stay away from the office too long during the pandemic. The bank said at the time that the conversation was about returning people to the office once officials deemed it safe, and that the company was “sparing no expense or consideration taking care of our people.”Then in a second-quarter regulatory filing, the bank flagged “weaker trading performance” in the unit’s derivatives business. Though that business grew versus the previous year, it lost more than $100 million on some positions held in Europe, the Middle East and Africa, according to people with knowledge of the matter. The company’s broader European business has seen a series of shakeups, most recently naming Martina Slowey to run equities for EMEA, replacing Julien Bahurel, who will leave after a transition period. That follows the June departure of Andrew Mitchell, head of equities trading in the region.Frustrating ManagersGallo, whose full first name is Fabrizio and goes by Fab, is known to frustrate his managers with a domineering style, getting deeply involved in trades and personnel decisions rungs below him, according to bank employees. That includes intervening in reviews for members of trading desks, sometimes overruling assessments drafted by the managers under him.A voracious reader, he cuts the image of a cultured intellect. He’s also seen as arrogant. Colleagues say that in moments of frustration over the years, Gallo has lashed out at subordinates, calling them dumb. That and his blunt communication style have created detractors within the division, who accuse him of being unnecessarily abrasive.Some Bank of America employees also took umbrage at the leaked recording of Gallo. On it, he could be heard telling staff that if they wanted to keep critical roles, they would need to “make a decision” about coming back to the office, CNBC reported in April.“We cannot provide proper and orderly markets if 99% of the population decides they don’t feel comfortable,” Gallo said on the recording. “You cannot on one hand say you cannot trust the firm and on the other hand get the money from the firm, for a long period of time if you are in a critical function. Now if people decide they don’t want to be in a critical function we can have that conversation too.”Bank’s ImageThe remarks came amid a debate inside many Wall Street firms over who could stay home and for how long. Yet those words didn’t quite gel with Bank of America’s efforts to remake its public image as a good corporate citizen after the 2008 financial crisis. Moynihan has been a prominent voice from the business community during the pandemic, pledging to support staff through tough times and resisting headcount reductions. He’s also highlighted the lender’s forbearance activities, its participation in the government’s rescue-financing program for small businesses and a $1 billion pledge to communities of color over four years.Gallo joined the bank in 2011 from hedge fund Brevan Howard Asset Management LLP and also spent more than a decade at Morgan Stanley, serving as head of equities and global proprietary trading.Despite his senior role, he keeps a relatively low profile. One of the few public references to Gallo is at the University of Chicago, where there’s a dorm named after him. He contributes to financial aid and career programs there.His almost-decade-long run as sole head of equities was remarkable for its duration in an industry where co-chiefs are often the norm, forcing executives to compete and leaving firms with leadership options if businesses don’t perform. Before the latest management shuffle, Gallo reported to the bank’s chief operating officer Tom Montag, who’s also president of its global banking and markets unit. If Gallo stays after the promotions, he will report to Demare.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Former FDIC Chair Sheila Bair says regulators are allowing banks to artificially boost their capital ratios, arguing that the Fed should suspend dividends instead.
(Bloomberg Opinion) -- Saturday is Berkshire Hathaway Inc. earnings day, but don’t count on there being many insights from Warren Buffett himself.As Berkshire prepares to report its latest operating results and an update to its even more closely followed cash figure, what investors want most of all is to hear from the Oracle of Omaha. But unlike other companies, Berkshire’s quarterly earnings aren’t that illuminating. They usually entail only a perfunctory statement of the overarching numbers, with no prepared remarks or chance to ask questions.Berkshire’s longstanding tradition of not hosting earnings calls has always made it an outlier in Corporate America — that and the unconventional practice of reporting on weekends. But not having any regular forum to hear from Buffett and Berkshire’s other executives is especially unfortunate during a global pandemic and recession in which shareholders are seeking direction.Buffett has lived through numerous crises, and each time he remained sanguine about America’s economic prospects, while the conglomerate and reputation he built always emerged relatively unscathed. Covid-19 changed that. Shares of Berkshire have fallen 10% this year, while the S&P 500 index is back in positive territory.The last time shareholders heard directly from Buffett, he was in a lonely auditorium sounding dispirited during what should have been Berkshire’s annual investor summit. The company, which in the past has taken advantage of downturns to vacuum up good companies, was instead selling stocks as the virus worsened. Meanwhile, some of the most resilient members of the market have been technology companies and dividend payers — Berkshire is adamantly neither. Buffett did warm to two tech giants in recent years: Apple Inc. and Amazon.com Inc., investments valued at $108 billion and $1.7 billion, respectively. But Buffett was a latecomer to the space, which has boasted a 208% return over the past five years, compared with Berkshire’s 42% gain. Increasingly, observers are questioning whether Buffett has lost his touch. Berkshire’s operating results, which are fairly predictable, have become less relevant to its shareholders over time. That’s not just because its stock-market investments now account for more than half the company’s value. It’s also that so much of the reason for owning Berkshire stock is the prospect of what Buffett does with the company’s cash. Lately, that’s been very little. Berkshire did buy more shares in Bank of America Corp. in recent days, after ditching most of its Goldman Sachs Group Inc. stake, but investors won’t find out what else Berkshire bought and sold until next week. Last month, it agreed to acquire $10 billion of natural-gas assets and associated debt from Dominion Energy Inc., a deal that had strategic logic, but fell well short of the fireworks moment investors have long awaited. (In June, I wrote that Costco Wholesale Corp. should be Buffett’s next takeover target — now that would set off fireworks.) Bill Ackman, the widely followed hedge-fund manager, even exited a position in Berkshire in May after determining Buffett’s reluctance to do deals may hold back its stock price. If not a deal, there’s at least one other announcement investors are bracing for: Buffett stepping down. He’s set to turn 90 years old at the end of the month, which he jokes is “urgent” territory. He has taken notable steps in recent years to line up his succession, such as elevating Greg Abel from the energy side of the business and Ajit Jain from the reinsurance side to vice chairmen. Abel also joined Buffett on stage during the virtual May meeting, as opposed to Charlie Munger, who is 96.Earnings calls can be mundane, especially when executives waste the time rattling off a financial report card that can be found in public filings. But they can also be fascinating opportunities to hear from people with a special vantage point in the broader economy. In the case of Berkshire, it would also be a chance for shareholders to get better acquainted with Abel or whoever is tasked with someday filling Buffett’s shoes, as well as the many other executives that run Berkshire’s dozens of businesses. And plus, how can Buffett retire without ever getting to hear “Nice quarter, guys?”This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.