Party-pooper steals show as new Credit Suisse CEO
ZURICH (Reuters) - Brady Dougan used to be known as the Credit Suisse (CSGN.VX) investment bank head who banned parties and color photocopying -- part of a larger drive to reform an institution that was badly damaged by the 2002 downturn.
But on Thursday, the 47-year-old American won his spurs as a top global manager after he was named chief executive of the 150-year-old Swiss bank in a move that stunned investors and helped send Credit Suisse shares to a record high.
Dougan, who rose through the ranks in the investment bank to work in virtually every department, will replace the cigar-chomping German Oswald Gruebel, who reversed multi-billion-dollar losses and led a sweeping restructuring that has restored profitability and confidence in the group.
It also marks a cultural shift, putting a plain-spoken Midwesterner -- a long-distance runner who shuns golf and has a penchant for hard work and little sleep -- in sole charge of a company whose roots are thoroughly European for the first time.
"The most interesting thing is to have an American in charge of a Swiss bank. That's a major cultural change," said David Williams, senior analyst at Morgan Stanley.
Big questions include whether Credit Suisse will keep its slate clean after giving investors some nasty surprises, including a 3.3-billion-franc loss in 2002 and fines from U.S. regulators during the euphoria of the dot-com era.
Equally importantly is whether the bank, the world's 16th largest by market value, can continue with its sprawling structure -- described by Dougan as an aircraft carrier -- in competition with even larger rivals such as JP Morgan (JPM.N) and Swiss rival UBS AG (UBSN.VX).
Investors on Thursday certainly gave Dougan the benefit of the doubt, pushing the bank's stock up around 4 percent to a record high of 92.25 francs after his division, investment banking, posted record revenues and a near-fourfold increase in pretax profit.
"If that result is sustainable and he has put in place a business platform that allows Credit Suisse to generate billions of Swiss francs in value extra for shareholders, then his promotion to CEO seems fully deserved," Williams said.
EYES TO ASIA
Dougan left the University of Chicago with a business degree and started his career at Bankers Trust -- later purchased by Deutsche Bank (DBKGn.DE) -- before moving to Credit Suisse in 1990, working in the nascent field of derivatives.
After a stint in Asia, Dougan moved to New York, worked through virtually every department of the investment bank and after a decade was dubbed "the youngest CEO on Wall Street" when he was named head of the investment bank in 2004, following another American, John Mack, who was pushed out in a power struggle.
Dougan's biggest accomplishment was to continue Mack's reforms, pushing the compensation-to-revenue ratio, a closely watched measure of efficiency in investment banking, down to 42.2 percent in the fourth quarter from a previous 53.5 percent, a development one analyst called dramatic.
"He's a very committed operator. Everybody always jokes about the line he puts out which is 'sticking to the plan'," said one former colleague, who asked not to be named. "He sets very ambitious targets and then always talks about sticking to the plan."
"He's not a very well know person externally, but he's very highly respected internally," said the banking industry executive. Continued...
