WhenBank of America Corp. recently raised his next category of senior executives, one name was conspicuously absent: Fab Gallo.
Few would have bet against the marathon head of the company’s global equities division, especially after setting a record for earnings earlier this year in the most messy markets in a generation. Yet after a conference call recording leak propelled Gallo’s blunt communication style into the audience and turmoil arose in parts of his business, bank bosses left him behind. .
While eight colleagues were invited to join the company’s elite management team at the end of July, Gallo was asked to share tasks with a former subordinate.
The snub gained attention on Wall Street, shining the spotlight on an executive known to push his subordinates particularly hard. It has since sparked discussions between him and senior executives over how long he was at the investment bank, according to people familiar with the situation who asked not to be named discussing staff. Another solution could still be found.
Gallo, 54, returned messages to a company spokesperson who declined to comment.
The trading veteran was ignored when Bank of America unveiled a series of promotions and added executives to its top decision-making body. Among the new panelists is his longtime counterpart overseeing the fixed income markets, Jim Demare, who has taken over the head of the global sales and trading division. One of Gallo’s subordinates, Soofian Zuberi, has been promoted to jointly lead the stock trading business alongside him.
It marked a quick change of fortune for the industry veteran whose operations have been credited with tackling the unprecedented challenges posed by the coronavirus pandemic in March, when traders were forced to work from home as traders were forced to work from home. markets plunged into the nose.
At the end of the first quarter, the turnover of the equity trading division jumped 39% to a record high. In May, CEO Brian Moynihan praised Gallo for the “good job” he was doing alongside fixed income chiefs Demare and Bernie Mensah, who was also raised to join the management team. In the second quarter, equity sales increased by 7%, fueled by cash and customer financing.
Yet there were also bumps. In April, someone leaked a recording of a controversial conference call to media outlets, including CNBC and theNew York Times. On top of that, Gallo could be heard saying that “critical” workers could not stay away from the office for too long during the pandemic. The bank said at the time that the conversation was about getting people back to the office once officials deemed it safe, and the company “spared no expense or consideration in caring for our employees.” .
Then, in a second quarter regulatory filing, the bank reported “weaker business performance” in the unit’s derivatives business. Although this company has grown from the previous year, it has lost more than $ 100 million on some positions held in Europe, the Middle East and Africa, according to people familiar with the matter. The company’s broader European activities have seen a series of upheavals, the most recent having appointed Martina Slowey to manage equities for the EMEA zone, replacing Julien Bahurel, who will leave after a period of transition. This follows the departure in June of Andrew Mitchell, head of equity trading in the region.
Gallo, whose full first name is Fabrizio and goes by name Fab, is known to frustrate his managers with an overbearing style, getting deeply involved in occupations and personnel decisions below him, according to bank employees. This involves intervening in the reviews of the members of the trading desks, sometimes by canceling the evaluations written by the managers under his orders.
Voracious reader, he cuts the image of a cultivated intellect. He is also considered arrogant. Colleagues say that in moments of frustration over the years, Gallo has lashed out at subordinates, calling them stupid. This and his blunt communication style have created detractors within the division, who accuse him of being needlessly abrasive.
Some Bank of America employees also took umbrage at Gallo’s leaked recording. In this regard, staff may have been heard telling staff that if they wanted to retain critical roles they would have to “make a decision” about returning to the office, CNBC reported in April.
“We cannot provide proper and orderly markets if 99% of the population decides not to. feel comfortable, ”Gallo said on the recording. “You can’t on the one hand say you can’t trust the company, and on the other hand get the money from the company, for a long time if you’re in a critical position. Now if people decide they don’t want to be in a critical position, we can have that conversation too. “
The remarks came amid a debate among many Wall Street companies over who could stay home and for how long. Yet those words didn’t quite match Bank of America’s efforts to remake its public image as a good corporate citizen after the 2008 financial crisis. Moynihan was a prominent voice in the business community during the pandemic, committing to to support staff in difficult times and to resist downsizing. He also highlighted the lender’s forbearance activities, its participation in the government’s small business bailout funding program 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, as head of global equity and proprietary trading.
Despite his lead role, he keeps a relatively low profile. One of the few public references to Gallo is at the University of Chicago, where there is a dormitorynamed after him. He contributes to financial aid and career programs.
His nearly ten-year tenure as sole head of equities was notable for its length in an industry where co-leaders are often the norm, forcing leaders to be competitive and leaving companies with leadership options if companies do not work. Prior to the latest management reshuffle, Gallo reported to the bank’s COO, Tom Montag, who is also chairman of its banking and global markets unit. If Gallo stays after the promotions, he will report to Demare.
– With the help of Gillian Tan and Ruth David