Morgan Stanley’s CFO Nears Her Debut in Wall Street’s Glare
(Bloomberg) -- When Morgan Stanley unveils what’s expected to be one of its best quarters ever, a new voice will lead Wall Street through the numbers and the strategy.
Sharon Yeshaya has been known to Morgan Stanley’s top brass ever since Chief Executive Officer James Gorman plucked the former trader out of the firm’s then-struggling fixed-income division and made her his chief of staff. Soon, the finance world will become familiar with Yeshaya, after her recent ascent to chief financial officer.
In her first interview since that appointment, the 41-year-old Morgan Stanley lifer recalled her unusual trajectory -- harboring doubts about finance as a junior banker, jumping to a trading unit that was soon upended by the 2008 financial crisis, and then nervously interviewing to get out. Before becoming CFO, she headed investor relations.
Yeshaya’s latest promotion, revealed in May, came alongside the elevation of four White men who were cementing their status as potential CEO candidates. The moves set off some buzz across Wall Street and in Washington. The slate even prompted a question from a U.S. senator on the lack of diversity in the bank’s top rungs. She has thoughts on fixing that too.
The following are excerpts from the interview, edited for length and clarity. Analysts estimate Morgan Stanley will report a $3.1 billion profit on Thursday morning in New York -- just shy of its record for a second quarter.
The offer to become CFO was a surprise.
Gorman “asked me directly not that soon before the announcement came out if I’d be interested in being CFO of the firm. He was jovial and he was nice and he was very complimentary. I did not expect that to be the conversation that we were having. I did not think that that was the next step, no.
“The role of the CFO, over the course of the last 10 years has evolved to be a more strategic role, and a different type of role than it was. And I think that the IR function at Morgan Stanley has always had somewhat of a more strategic lens than possibly at other institutions.”
She arrived amid the dot-com boom. After the bust came doubts.
“I went to Penn, I actually started in the college and transferred to Wharton. I remember the concept of supply and demand being new to me. I did a dual degree between economics, which I thought was theory, and finance, which was the practical implementation. I did have aspirations to do something one day in public policy.
“For those who have ever been to Penn or went to Wharton, the most obvious next step is usually to go into an investment bank. At the time Morgan Stanley had an M&A technology group and I did that for the summer of 2000 during this sort of dot-com boom. So it was quite interesting, and I received an offer to come back and join full time in 2001.
“It was a challenging place to work. I was starting, and then 9/11 occurred soon thereafter. It was a difficult time both to be in New York and to go through the tech bust. The deals that I ended up working on were less on the up-and-up. It was just probably less interesting than I had personally hoped or wanted. So I was at a crossroads after the first two years, and questioned whether I wanted to leave Morgan Stanley.”
Yeshaya pivoted into research.
“I made the decision with advice internally through a head of economics here to first consider research at Morgan Stanley. And this was a period of time in Morgan Stanley’s history where there were very big-name macro economic strategists and economists, so it was the generation of Byron Wien, Stephen Roach, Steve Galbraith and Amy Falls.”
Soon, she became a trader.
“I had to make a decision, which is: Do you actually go and pursue a Ph.D. and follow this dream of policy-making and academic research? Or would it be best to kind of understand tactical skills associated with a sales and trading environment?”
Few women are in risk-taking roles.
“We had very few women who were risk takers. The assumption at the time was women can’t take risk or women can’t handle risk. What you fail to realize is that your job is to manage the risk. Like the job is not to sit and have a poker game, right? And so that’s what I think is the difficulty. You’re breaking the stigma that is actually probably misjudged or misplaced.
“I have close friends still there, managing directors who are women. And I think that the main thing is not that the stigma probably persists, but there are still few women in many of these seats. So that then makes it difficult for a young woman to believe that it is an appropriate place for her to necessarily be or pursue.”
Then came another pivot: Working for the CEO
“Fixed income was a difficult place to work at the time if we’re talking about 2014. Recall in 2015 Morgan Stanley ends up contracting 25% of its workforce, so you can imagine working in that group. I’m sitting in foreign exchange, Morgan Stanley’s not the leader in foreign exchange and doesn’t know what it’s going to do with its fixed-income business.
“Look, I was scared. Wouldn’t you be? I was 34, I was relatively young, your hands are shaking, you’ve never been upstairs to the 40th floor. It was quite dark and I remember it was a 5 o’clock interview.
“I don’t think I was looking for a warm and fuzzy relationship. I was looking for -- how do I get out of fixed income, and try and make a difference? I like corporate finance. I like finance, and I just want to work here and I just made managing director, and I didn’t really know what I was going to do with the next stage of my life.”
Role models help deliver diversity.
“The first, most obvious, thing is: There’s somebody out there who actually looks at you and thinks to themselves, ‘I’ve got a shot.’ And I think that all of us have looked at somebody that way, saying, ‘Well, maybe it is possible that if I work really hard, someone will notice me, and then I will be able to move forward.”’
“I don’t know if it’s a tone, or if it’s a way to attract other women, because you can connect with them in a different way because you faced some of the same challenges and struggles that they might face in their own lives. I can have a conversation with a young woman who also has two immigrant parents, and also has a different situation and also wonders how to balance a life that looks different. Those are perspectives that you offer not just as a woman but as having different characteristics, no matter what type of minority you are.”
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