The economy has barely crawled from its hospital bed, and bankers and analysts already are guessing when and how the next round of financial institution mergers and acquisitions will begin. Will Chicago-based Bank One Corp. make a play for FleetBoston Financial Corp.? Who will be Citigroup Inc.’s next target?
But before the investment banking party begins again, executives at the nation’s banks might consider taking a closer look at themselves.
“Bank consolidation is a global phenomenon that may enhance stakeholders’ value if managers do not sacrifice value to build empires,” according to a paper from the Federal Reserve Bank of Philadelphia.
Most studies show that acquisitions tend to damage acquiring banks’ market value–and raise median chief executive compensation by 20 to 30 percent even when share prices tumble–with some exceptions.
Banks whose management is “entrenched”–largely owned by insiders–tend to fare worse after acquisitions than banks whose executives are not entrenched, the paper said.
Most banks perform better when they grow internally rather than through acquisitions, the study found, but banks with less-entrenched managements stand a good chance of benefiting from acquisitions as well.
Marrying kind: Married men earn approximately 11 percent more per hour than men who have never been married, a topic explored in an article from the Federal Reserve Bank of St. Louis.
Even divorced and separated men make about 9 percent more than those who never married, and the gap widens for those 45 and older.
But why?
Some evidence indicates that employer discrimination could be a reason for the disparity, and that it has decreased in recent decades.
Another popular theory is that married men spend less time on housework, but there is scant data to support the idea and one study in 2000 refutes it. Even that study, however, found that married men are more productive at work.
Where does all that productivity come from? Some Fed researchers have suggested it is a byproduct of productivity from the marriage itself, and that even divorced men maintain that advantage.
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Others conjecture that traits that make a man a higher wage earner are the same traits that give him a tendency to marry.
“The qualities listed as desirable for mates are often synonymous with desirable characteristics for an employee: responsible, honest, mature, logical, intelligent and efficient,” the Fed article said. “Perhaps the tendency to take on responsibility at work indicates a tendency to take on responsibility and stability in his personal life.”
There also is evidence that physical attractiveness–which does not hurt when you’re in the market to marry–tends to have a positive effect on wages.
Bank Notes: Sidney Taylor, cofounder and chairman of the executive committee at Chicago-based Cole Taylor Bank, died last week at the age of 79. He began his career in 1946 as a clerk with the Main State Bank in Chicago and eventually became its president. In 1969, he and business partner Irwin Cole purchased the bank from Taylor’s father-in-law.
– Thinkorswim Inc., a Chicago-based online broker dealer specializing in options, hired Robert Stapleton Jr. as CEO. Stapleton had been head of wealth management for Standard Federal Bank, a Troy, Mich.-based unit of ABN Amro.