Dear Remaining Members of the Barclays Board,
Heard you're having some senior personnel problems. The Chairman of the Board, the Chief Executive Officer, and the Chief Operating Officer have all resigned.
Gee, who's next?
Trust you aren't abandoning ship too. If so, hold off till you've finished my letter.
First, my sympathies. Terrible that you've lost these amazingly talented people.
Yes, they and the execs they replaced, somehow missed, ignored, abetted, or directed Barclays' decision to rig Libor over, well, a long time. And yes, you just paid an almost half-billion dollar fine for their lapses. But, hey, it could have been worse.
Sorry too that the bank's credit rating has been lowered. Ya think Moody's and S&P are piling on?
The good news is that maybe, just maybe, you can hire new execs that are pretty good for a whole lot less.
Heard you were paying Bob far north of $10 million a year to run the shop. Big number, but he surely deserved every penny.
OK, he's not the best note taker and doesn't communicate all that clearly with regulators and gets sick when he reads emails from traders with bad culture, but hey.
On the other hand, if he were $10+ million good, you'd think he wouldn't have had to resign. You'd think that he'd have figured out how to run things in the last couple of years so as not to have had to resign this year.
Hey, what do I know. I got to give it to Bob, though. He gives good testimony. Virtually turned his appearance before Parliament into a Barclays' pep rally.
So Bob will be a tough act to follow. But let me blurt out what I really want to say.
I'm willing to do Bob's CEO job for just $1 million a year. That's $1 million straight -- no bonuses and no parachutes if I have to resign. I don't see why I should expect a bonus for doing my job, and, frankly, $1 million is a lot of money.
Does the CEO have his own jet? If so, I'd sell it. (Can you swing business class?)
I'd also replace all your execs now earning more than $1 million with top people willing to work for $1 million or less. And I'd ask you Board members to take a big pay cut.
I know, being a member of the board of a big bank like Barclays takes time. Plus, you have to travel to those far off resorts to meet. But face it, it's a cool job. You get to tell people you're a Director and you get the inside scoop on Barclays' scandals.
Like me, the people I'd hire would be economists who know enough about banking to direct the company, but who also know enough to know when they don't know enough.
We economists are a very risk averse and careful breed. Show us a highly complex financial transaction or product, we're gonna say, "forgetaboutit."
Las Vegas won't let the American Economic Association hold its convention in that fine city. Last time that happened, virtually none of the economists gambled a penny. They just stood around watching other people do so while muttering, "How stupid."
We economists are also not real big on cutting corners or trying to outsmart regulators. It's just not in our make up.
The saying's true -- economists are people who are good with numbers, but don't have the personality to be actuaries. And you need personality to talk people into products they don't need or want.
Ok, I'm going to beg:
Please, please, please make me your CEO! I'll hire people who are too dumb to be too smart for their own good as well as too smart to be too dumb for their own good.
I know, you're probably thinking, "We need an experienced banker." Hum, Jimmy Cayne, Dick Fuld, and Angelo Mozilo are available. They're experienced. But, ya know, they also ran into some trouble.
I'm thinking about PhD economists to fill Barclays' executive positions. People like Susan Woodward, the former Chief Economist of the SEC, Simon Johnson, the former Chief Economist of the IMF, Jeff Sachs, the head of Columbia's Earth Institute who has enormous financial experience, Mervyn King, who will shortly need a job and knows a thing or two about banking, Ken Rogoff, who's co-written the book on sovereign debt default, Stan Fischer, the current head of the Bank of Israel, Michael Bosking, former Chairman of the Council of Economics, Anat Admati, one of Stanford University's top banking specialist, Perry Mehrling, Columbia University's superb expert on banking policy and financial history, and, well, I could go on for a mile, but I know that some of you folks having been holding off resigning, so I'm going to close.
There are a huge number of highly talented, completely honest, boring, risk averse, and extraordinarily knowledgable economists who could run Barclays far better than its been run of late. They wouldn't hunker down in their offices waiting for problems to boil up. They'd be scared enough of losing their -- for them -- extremely high-paying jobs to actually hang out on the trading floor and in other parts of the bank and learn exactly what deals are being cut so they can decide if they are deals that need to be cut (yes, a bit punny).
I'm serious. I love London. Hire me. $1 million flat. No plane. I'll set things straight with the kind of people you need.
You're business is faith-based banking. Trust me.
Follow Laurence J. Kotlikoff on Twitter: www.twitter.com/kotlikoff