The fiercely competitive onetime Duke University football player left Morgan Stanley in March after losing a power struggle with CEO Phil Purcell. Last month he resurfaced, typically ahead of schedule, as the new CEO of Credit Suisse First Boston. “I thought I would do something in September,” says Mack, “but the idea of pulling this all together to create a culture got pretty exciting.”
Mack, who made his name drilling a team-oriented philosophy into Morgan Stanley, will have his hands full. Though his “one-firm firm” credo was adopted by rivals like Lehman Brothers, it has been more preached than practiced at CSFB. Under former CEO Allen Wheat , unceremoniously booted by Credit Suisse chairman Lukas Mühlemann to make way for Mack , fiefdoms proliferated. The most noteworthy has been that of technology banking superstar Frank Quattrone, whose group acted like a firm within a firm. CSFB’s tech banking practices are now part of a widespread Securities and Exchange Commission probe into the way Wall Street allocated hot IPOs during the late 1990s technology bubble. Quattrone left Morgan Stanley in 1996 for more independence, but Mack insists that “Frank believes in creating a one-firm culture, and he and I are going to spend some time talking about how he can help me do it.”
Mack the Knife can be mighty persuasive. He’ll need to be. CSFB’s compensation levels are among the highest on the Street: 59 percent of revenues. (A 50 percent ratio is average.) Late last month Mack set about asking senior bankers to renegotiate their contracts. Bankers can always rebuff their new CEO’s overture , and in that event, he’ll honor their deals , but they likely won’t have much of a future with the firm. “Long term we need to get everyone on the same compensation plans,” says Mack. “It takes two or three years to really get the progress that you want.”
