Back Up the Truck

Back Up the Truck

For the forty-five years of my Wall Street career the expression to “back up the truck” refers to something a guy by the name of Tom Pope said to me. Tom had grown up in the International Department of our bank in the first half of the 1970’s. That was when the domestic banking market was in its decline due to large loan losses on loans to REITs that had gone bad and the beginning of the disintermediation of banks from their normal bread and butter business of short-term working capital loans. The securitization of lending had begun in the commercial paper area and large creditworthy companies had less and less need for short-term bank loans and only the most skittish of Treasurers were willing to pay extra to their bankers to supposedly insure credit availability. Commercial paper looked like a deep market that would not dry up, but just keep expanding. In those mid-1970’s years the age of cash management had arrived and corporate borrowers were becoming more and more arms-length with their bankers versus the chumminess they had both enjoyed in the low-rate days of the decades after WWII. The U.S. market was getting very flinty-eyed while the foreign banking clients (almost entirely banks and sovereigns) were still in the dark ages and barely understood the concept of the time value of money.

When I arrived on the banking floor from business school at age 22 in 1976, I was assigned for the summer prior to the formal training program to the Northern Europe Group. They made their money entirely by keeping large balance deposits from these foreign banks and sovereigns and getting it all at no interest cost and in exchange for minimal banking services. It was an honor for these foreign institutions to be allowed to keep money in a large U.S. bank and to be able to say they did business with Bankers Trust, or J.P. Morgan or Chase Manhattan. In those early petrodollar days which bred the Eurodollar market, there was value to these foreign neophytes to just being able to keep their money in the almighty U.S. Dollar. During that first week of the summer, I was dragged to an International Department quarterly meeting where I heard the Department Head, Carlos Canal, an Ecuadorian with a goatee and of regal bearing, tell the troops that the Department was now 80% of the bank’s revenues and about 110% of its profitability. This brought about a loud multilingual round of guffaws and back-slapping. I took it all in and was determined to figure out where the value added was coming from that was driving this sort of performance.

I knew they had lots of good clients (all the top banks and nations of the world), but I still wanted to know what they were doing to earn that money. That was when the Federal Reserve made an announcement that Bankers Trust would not be allowed to buy a few risky-dink banks in upstate New York due to insufficiency of capital. This created an amazing stir and the fire drill immediately extended to the International Department where everyone was calling their clients to assure them that all was OK and that it was just politics about the Controller of the Currency not being happy about the trend toward bank consolidation, yadda, yadda, yadda. We were solid as a rock and our $600 million in capital was MORE than sufficient for everyone to rest assured that their $11 billion of deposits were safe as houses, as they liked to say in the U.K. I began to realize that the image of sustainability was the product that the international bankers were selling to their clients.

Along the way, I got introduced to a senior International Banker named Tom Pope. Tom was Canadian by birth and had worked as a diplomat for the Canadian Foreign Service before joining Bankers Trust in 1969. Tom recently died at age 87, but when I knew him he was very much in his prime and trying to make a living worthy of his heritage as the son of a General and Countess of Quebecois origins. Tom epitomized the image of a successful international banker with lots of presence and aplomb, but very little specific knowledge or skill set. In many ways I admired his generalist ways in a world being driven into specialization.

When I asked him how people became successful at Bankers Trust he never once talked about deals or revenues or product skills. He spoke of climbing the ladder and was very fixated on the compensation structure of the bank. In those days, there was no trickle-down even suggested. If you were lucky enough to rise in the ranks you got paid well, otherwise you had some degree of job security and six weeks vacation to make the most of your life. He explained to me (quite inappropriately for a senior officer to tell a junior nobody) that when you got to be a Vice President (equivalent to a junior partner in a law firm at the time) you got a healthy salary, a shot at a bonus and the opportunity to rise higher if you were so fortunate. Then, when you became a Senior Vice President (sort of full partner status) you got to reach into the treasure chest with both hands and take what you could carry. But if you were so lucky as to make Executive Vice President, sort of like making Flag Rank or General Officer status in the military, you got to back up the truck to the treasure chest and load as much as you could haul away. After that it took a lightning strike, a platinum pedigree and a good hairdo to get chosen for the Office of the Chairman, where the Chairman, Vice Chairmen and President hung their hats. There was no point in discussing their compensation since it was a matter of public record in the Proxy Statement and suffice it to say, no trucking was required since they simply delivered your gold bars to your own personal vault under the building. That was my lesson on how to become successful in banking.

I made Vice President at 27, Senior Vice President at 30, Partner (a new designation that was forty of us in the first tranche in a bank of 12,000) at 33. From there the titles were less important that the jobs since I was a CEO of a subsidiary at age 29 and the CEO of many many subs thereafter. I did make it to the Management Committee at the age of 43, which was the equivalent of the highest inner circle, and I was the functional COO for about 6 months, but never had that business card since by then it was only about money and power, not prestige and trappings.

I am now thinking once again about backing up the truck, but it has nothing to do with money, titles, power (except under the hood) or prestige. It is about hauling plants, mulch and Home Depot purchases back and forth between the nursery, the rock store and my little hillside. I have a $100 deposit down on a Tesla Cybertruck, less because of the sexy and sleek lines and more because it will replace my Tesla X and use my Tesla Wall Charger and I will only use it locally anyway as I do my X since it will replace my X. Life is about passages, as the book by that name published in 1974 by Gail Sheehy says. I have passed from not knowing what’s what in banking to not knowing what’s what in gardening. I have passed from worrying about how to achieve success to how to ignore achievement in valuing myself day-to-day. I worry less about making money than about not spending all that I have made too quickly. My children are back where I was, figuring out how to get theirs. I neither pity them nor envy them. It’s a phase of life and the only thing I would tell them is to never invest yourself too fully in anything that can get hauled away in a truck. The only thing I want to back up the truck for these days is a nice cedar mulch or some gallon tubs of succulents.