Scott Bok on How Bankers Spread the Gospel of Capitalism

When we think about the prospect of deglobalization (whatever that means) we often think about it in terms of the goods economy. Supply chains get rerouted. Manufacturing becomes more localized, and possibly less efficient. But changes to the global world order also have implications for Wall Street, and the world of dealmaking. On this episode of the podcast, we speak with Scott Bok, the longtime former chairman and CEO of the investment bank Greenhill & Co., which is now part of Mizuho. Scott is the author of the new book, Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing, which covers his long career as an investment banker starting in the early 1980s. We talk about what investment bankers actually do, and also how the great Wall Street dealmaking boom over the last several decades is, in large part, a story of globalization, and the opportunity for firms to roll up localized companies into cross-border giants. He talks to us about how the bankers themselves served as essentially evangelists of the pro-capitalism message of the Reagan era, spreading the gospel of shareholder primacy all around the world.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.

Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.

Speaker 3 (00:22):
I'm Jill Wisenthal and I'm Tracy Alloway Chrasy.

Speaker 2 (00:25):
I would say that within the broader realm of finance
and markets and Wall Street and stuff that we cover
like deals in deal making, kind of maybe we don't
cover it enough.

Speaker 3 (00:37):
Yeah, it's kind of. I guess it's unfortunate because I
think when a lot of people think about Wall Street,
I mean, the guy doing big M and A deals,
the rainmaker is kind of one of the images that
people have in their minds. I guess, alongside you know,
traders taking oodles of risk. I think people are always
thinking about the guy on the phone. He's like, you know,
talking to his big client. He's going to strike this big,

(01:00):
multi billion dollar deal. So yeah, lots of interest.

Speaker 2 (01:04):
Yeah, there's like two images, right, the guys staring at
his screen clicking either buy or sell as the line
moves really fast. And then someone you know, working over
lunch bulfing and having a nice lunch or stuff. But
I don't really know, I mean I don't know that
much about the first one. I really don't know that
much about the second one. Those seem like very good jobs.
I think I would be very terrible at that job.

(01:26):
But yeah, there's so much to learn on that. I
have so many questions about this area. And we should
probably talk about deals and the trajectory of deals and
the history of deals and the future of deals a
little bit more.

Speaker 4 (01:38):
Let's do it.

Speaker 3 (01:39):
So I have to say I used to cover the
investment banks for the ft, and within that there was
obviously quite a lot about the m and a business.
The one thing I know for sure is that the
Bulge Brackets, even though MNA is not the entirety of
their business, as you know, they care a lot about it.
They care a lot about the league tables and who's
doing better than whatever other firm. It's extremely competitive. So

(02:02):
let's dig into it.

Speaker 2 (02:03):
You know, just to reveal my own ignorance a little
bit more. I don't even think I have a great
handle on the question of why within one firm, banking
and trading are often parts of the same company.

Speaker 3 (02:16):
Oh, why they're the same company. Yeah, I thought you
were going to say you didn't understand why they were separated. No,
and that's why I was shocked.

Speaker 2 (02:22):
No, Like, why within a large firm. These are natural
compliments to each other as part of the business. Even
that I don't have a great handle.

Speaker 3 (02:30):
On, I have a feeling that our guests goes exactly
the answer to that question.

Speaker 2 (02:35):
We do, indeed have the perfect guest. We are going
to be speaking with Scott Bock, the longtime former chairman
and CEO of the investment bank Greenhilen Company. He is
out with a new book called Surviving Wall Street. So Scott,
thank you so much for coming on odd Lots.

Speaker 5 (02:50):
It's great to be here. Thank you.

Speaker 2 (02:52):
There's so much I want to talk about it, and
it's so bad that we could probably spend an hour
with you just answering very rudimentary questions about the business
that seems like out of a waste of your time.
I have a random question when I've always wondered about
for so long. You can make a lot of money
in investment banking and deal making and making deals happen.
What is the investment banker bring to the table? You know,

(03:15):
I say a company wants to buy another company, Why
can't they just go find it in the house. What
does the investment banker bring to the table that's so
valuable that companies, at least in some cases, are willing
to make the bankers quite rich.

Speaker 6 (03:27):
You know, I actually answer that question early in the
book because I think most people don't really understand they
pay these big fees. What do these people actually do?
And there's actually several things they do. Number one, they
may tell you it's the right time for an acquisition.
They might tell you what is the right value for
that acquisition. They might tell you how your stock price
might react to that acquisition. Importantly, they also give the

(03:47):
board of directors comfort that you know, management hasn't gone
off the reservation or the deal actually make sense, it's
going to get a reasonable response. And so it's a
kind of a very broad role. And you know, it's
one thing I like about it versus say training or
so many other aspects of Wall Street is you know,
this is never going to be outsourced to AI. There's
never going to be a button you push and an

(04:08):
M and a deal happens. You know, each one is
so different and so much just kind of the human
touch of trying to get people on both sides of
a transaction to come to agreement.

Speaker 3 (04:17):
Kind of an expensive sanity check on corporate management, though,
if you get them to talk to bankers and make
sure that you know the deal is not completely crazy.
But to Joe's point about the bulge brackets and why
do they have M and A on top of trading
or debt issuance and that sort of thing, maybe we
should talk about the big trend of the early two thousands,
which was all the boutique M and A firms getting

(04:40):
started and then getting a lot of traction versus the
bulge bracket guys like a Goldman Sachs or a Morgan Stanley.
And as far as I remember, the big pitch for
the boutiques was that they don't have a conflict of
interest and you know they're entirely focused on getting the
best deal for their clients. Is that the pitch?

Speaker 5 (05:00):
It was that simple, That indeed was the pitch.

Speaker 6 (05:03):
But you know that pitch developed out of circumstances as
opposed to being the original strategy. Here, here's a short
history of my career, which is kind of laid out
in the book. Okay, when I started in the business
back in you know, graduating from college in nineteen eighty one.
It's a terrible time. Dow Jones is below a thousand,
which a first crossed more than ten years before that,

(05:23):
you know, M and a almost unheard of private equity,
hedge fund, activist investor. Those phrases didn't even exist, and
the business was very specialized. So if you wanted to
get a tech deal done, you didn't go to Morgan
Stanley or Golden Sachs. You went to Hamburton Quist or
Alex Brown or Montgomery Securities. If you wanted to do
a UK deal, you went to what was called a

(05:45):
British merchant bank Kleinberg, Benson, Warburg, sg Warburg Bearing Brothers,
et cetera. So everything was highly specialized as to what
you did, and what happened is sort of the next
ten to fifteen years was a massive wave of mergers.
At the end of that wave of mergers, you know,
the four what they call the four horsemen who did
technology were gone. All the British merchant banks were gone.

(06:08):
Many US firms, including like Donaldson, Lufkin and Jenrett had
been absorbed, and essentially, at the time Greenhill started, I
would say almost all the advisory fees in the world
were paid to one of nine firms. There were six
in America and three in Europe. So it got very,
very concentrated, and I would say Greenhill was formed, and
then a whole bunch of other firms sort of followed us,

(06:29):
particularly once we went public. Greenhill was formed as kind
of a reaction to that consolidation. It's like you'd go
to a client and say, there are sort of two
flavors here. There's nine guys selling one flavor, which is
one stop shopping all the different products, very sales oriented approach,
and then we're selling this other flavor, which is we're
totally aligned with you. All were focused on is M

(06:50):
and A. We don't have anything to cross sell you.
And one thing I talk about in the book, which
is kind of interesting, is what really drove that conflict
pitch to clients was not something that anything to do
with M and A. I think it's when Elliott Spitzer
went after Merrill Lynch and other firms and eventually had
a settlement with whole industry.

Speaker 3 (07:08):
We just recorded with the Henry Blodgett follow Yeah.

Speaker 6 (07:12):
That look and he sorry to say it got in
a little bit of trouble for that line on the episode.
You may recall that, but yes, he was focused on,
you know, research, analysts writing glowing reports for companies they
didn't believe in to try to get share sold in
an IPO. But you know, it woke up corporate America
to the fact that sometimes there are conflicts of interest
you're not aware of, and why not hire a firm

(07:34):
that doesn't have any of those. So we kind of
adopted that as our strategy as our calling card, and
it worked really well.

Speaker 3 (07:41):
So conversely, the story I always heard from bulge brackets
was like, Okay, you can go with a smaller firm
that might not have a conflict of interest in all
these other businesses trying to get your attention and sell
you stuff. But if you go to a boutique bank,
there are some downsides. So obviously they don't have the
same financing and credit and capital market services that a

(08:02):
bulge bracket would have. And also they get paid only
when they complete the deal, and so you know they
want to complete the deal and they might not actually
be providing you advice on why you shouldn't do the deal.
What do you say to that pitch?

Speaker 6 (08:17):
Look, that is the legitimate counterpoint, and then the counterpoint
to that is yes, but our business is built entirely
on reputations, and if we're out there telling companies to
do deals that don't really make sense, it's going to
hurt our reputation. We're in a long term business. We're
trying to build a brand, trying to build a client base,
and so but fundamentally there's room for both players, and
both players have certainly thrived in the year since then.

(08:39):
His M and A has really boomed in America and
around the world. But what we did and what really
differentiated us, we had a different strategy. It was a
different flavor for companies, and many of them were worried
about conflicts, or maybe they liked a real small firm approach,
or they liked the hands on sort of seenior guys
working on the day to day aspect of the deal.
And so it worked very well, you know, and really
a whole bunch of firm followed us into that once

(09:01):
we actually went public and had a lot of success
with that.

Speaker 3 (09:03):
Yeah, we should talk about that, because you were kind
of a victim of your own success in some ways.

Speaker 2 (09:08):
Just to set the context for the rest of the
conversation a little bit more, why don't you just sort
of fill out the short version of your career history
and Greenhill specifically. You talk in the book about the
founder Bob Greenhill, also at Morgan Stanley, but just sort
of give us like the sort of the rest of
the outline of sure your slash green Hill's history.

Speaker 6 (09:28):
Sure, Sure, So I worked at Morgan Stanley for about
ten years after a brief time at the law firm,
walked out Lipton doing M and A. I was at
a vastly different level than Bob Greenhill. He is a
full generation, probably twenty five years older than I am.
So at the time I moved for some period to
London for Morgan Stanley, I was an associate, pretty lowly
job at the firm. Bob was president, pretty senior job

(09:49):
at the firm. By time I came back, he was gone.
What had happened and you guys alluded a few minutes
ago to know why are sort of bankers and traders
under the same roof, well back in those days is
one that was first happening, and that caused a bit
of a turf war really between a power struggle really
between Bob Greenhill and John Mack, who obviously went onto
an extraordinary career in a couple of different places and

(10:11):
as trading really grew in terms of scale and volume
and how much money you could make, how greatly you
could scale that business and put capital to work, you know,
the investment banking business became less important. I mentioned in
my book a great quote from a mentor of mine
at Morgan Stanley, who I don't mention his name, but
he used to say, investment banking is the hood ornament
on the Mercedes. The engine of the Mercedes is the

(10:34):
trading is the trade and trading operation. So Bob Greenhill
ended up going to work briefly for a client of
his name, Sandy Wild, another famous guy in our industry.
He was not really well suited. I think he would
even agree with this as kind of a pure administrator
a manager. He's a deal maker. And so he ended
up having a bit of a struggle there with another
guy you may have heard of, Jamie Diamond, who was

(10:55):
a very world at that level exactly, who was a
very young guy at the time. I'm working for Sandy
wil his mentor early in his career, and so they
had a falling out.

Speaker 5 (11:04):
Bob left.

Speaker 6 (11:04):
He hung out his own shingle, and I think he
did it not so much with any sort of grand strategy.
He did it with the sense of, you know what,
the big firms are really focusing on these capital businesses.
I like advising clients on deals. I'm going to hang
out my shingle to do that. And I joined him
in the pretty early days when the firm is tiny.
I think it had announced one transaction, and I went

(11:27):
really for the same reason. Actually I left between the
announcement and the closing of the Dean Witter merger with
Morgan Stanley. The firm is going to go from a
few thousand people to forty some thousand people. And to
be honest, I never saw myself working for a place
with forty thousand people, and so I was kind of
open to the idea of going to a small or
more focused place. So when Bob called, I took the

(11:49):
call and went there very quickly.

Speaker 3 (11:51):
Can I ask a cultural question, because I mean, the
book is called Surviving Wall Street and you get into
I guess, the daily rhythm of life working in a
business like that. But whenever I talk to or when
I used to talk to a lot of the big
investment banks, all the management likes to talk about how
special their culture is. We do things differently to others.
So I guess my question is what's the cultural difference

(12:14):
I'm doing air quotes here on a podcast. I don't
know why, but what's the cultural difference between being a
trader versus someone in M and A who's presumably very
client focused? And then how would you describe the cultural
differences between different m and a firm slash banks themselves.
Is it really all that different?

Speaker 6 (12:33):
I think it does differ quite a bit. So first
the question of sort of traders versus bankers. I mean,
trading is an analytical profession, it's a I think it's
more of an individualistic profession. You know, you're the guy
trading a particular kind of security.

Speaker 3 (12:48):
Just you and your screen, Like like your screen.

Speaker 6 (12:50):
Look, you spent a lot of time at the screen,
and you all sort of tied to the market.

Speaker 5 (12:53):
I mean your day.

Speaker 6 (12:54):
You get there really early in the morning because you
want to be ready for markets to open. You're there
for the full day, the closed, you go home pretty
soon after that. Investment banking is much more of a
team sport where literally, you know, in your junior years,
you're sitting there at nine o'clock having you know, pizza
or Chinese food. You just ordered in with your colleagues
because you've got two more hours or three more hours

(13:16):
of work to do that night. So it's a real
camaraderie that develops in investment banking and deal making in
part because people live together so much, they work long hours,
and they also travel together. So it really develops a
strong camaraderie, which is why culture actually is very important.
And yes, everyone says they've got a fabulous culture. I

(13:36):
will tell you I believe it. Greenhill really did, and
that won't surprise you at all. But you know, look,
you read these things about analysts who are being abused
for being overworked to the point where literally people are
getting sick, in some cases worse than that. And you
want to have a place where people feel like a human,
you know, where they're treated with respect by the more
senior people. Yes they work harder, yes they get paid

(13:58):
less money, but you've got to treat those people with respect.
And I think we did that, and I think many
of the best firms do that. I think there have
been some firms over the years that are kind of
too much of a sweatshop mentality, and that really doesn't
I think pay off in the long run.

Speaker 3 (14:11):
Joe, you know what happens after eleven pm, after the
bankers are finished eating Chinese food and they've done the deal,
they send them to the lawyers.

Speaker 6 (14:19):
And then the lawyers have.

Speaker 3 (14:21):
To stay up from eleven pm to six am to
finish the docs. I know this from personal experience.

Speaker 6 (14:26):
And now you have just explained why I left practicing
my husband.

Speaker 2 (14:46):
You said something at the very beginning that I think
was very important, which is that when you started your
career in the early eighties, the scale of the deal
making industry set aside the deal making industry deals period,
we're just not as prevalent. It was just not what change.

Speaker 6 (15:05):
I think this is going to segue into a really
interesting topic, but it did change right around that. I mean,
a grand innovation at Morgan Stanley in the years before
I got there was when somebody said to Bob Greenhill, hey,
why don't you form a group with three other people
and see if we can sell advice to companies who
want to do M and A deals. There were four
people in the group, right, So it was a tiny,

(15:26):
tiny business. And even when I started got to law
school in nineteen eighty four, it was a very small business.
I think looking back, what really drove a lot of
that was globalization. I think if you think back to,
you know, when I was a kid. I'm sure probably
you're younger, but when you were a kid, I mean,
every town had its own newspaper, every town had its
own bank, every region had its own soft drink brands,

(15:47):
its own ice cream brands, its own you.

Speaker 5 (15:48):
Know, yeah, other you know, consumer brands.

Speaker 6 (15:51):
And if you think about what happened in the ensuing years,
was you had trillions of dollars of m and A
that essentially rolled up companies into first and national and
then global sort of champions. And I looked back, for example,
because I thought this might be a topic given what's
going on in the world right now. And if you
look at cross border m and A and meaning buyer

(16:12):
one side, target and another from American companies. I mean,
I look back in the early nineteen eighties, there were
some years when there was roughly zero, and for the
last ten to fifteen years it's between five hundred billion
and a trillion dollars a year. So that's what really
drove it was you had a very fragmented industry in
every industry and still there's plenty of there's all more

(16:33):
deals to be done, but what really happened was forming
these national and global companies through M and A.

Speaker 3 (16:38):
So one thing you describe in your book and you
sort of explain all these different events through your personal career.
But five crises that defined Wall Street. So the collapse
of LTCM, the bursting of the dot com bubble, the
two thousand and eight financial crisis, the COVID pandemic, and
then the sort of aftermath. Talk to us about the aftermath,
because I think a lot of people would. I think,

(17:00):
you know, twenty twenty two was a terrible year for markets,
and we saw a lot of deal volume collapse. But
what's the sort of existential crisis that's facing deal making
in the post pandemic period?

Speaker 5 (17:12):
Sure?

Speaker 6 (17:13):
Yeah, Much of the book is really about leadership and
sort of navigating those five crises. And the reason Surviving
is in the title is that a large majority of
the Wall Street firms that were in business when I
started are long gone. So it really is a game
of survival played on a grand scale. And I do
talk about those five crises. The fifth one is the
hardest one to name in a pithy way, but I

(17:34):
think in some ways it was the most complicated because
I would say, if you wanted to describe it, I
would say it was the combination of COVID recovery when
there was a ton of stimulus put into the economy,
and the Ukraine invasion. The combination of those things drove
up inflation, drove up interest rates, and I think it's
fair to say we are still kind of reeling from that.
I think they even had political implications in terms of how,

(17:55):
you know, what president got elected and for what reasons
and so on. So think it was a very sticky
crisis that also involved the way we work, not just markets,
not just all the interest rates are we're going to
bring them down to try to reflight the economy and
all that, but really literally the way people work, you know,
trying to work from home and you know, not having

(18:16):
the same sort of in office culture and training and
kind of team efforts to win and do business. And
so that's been a hard one, I think for American
business to work their way through.

Speaker 2 (18:25):
I want to talk more about the actual reality of
globalization and what that means, because to this day, countries
feel prideful about their national champions even in Europe largely
integrated economies. Some of the issues with further integration has
to do with the fact that specific countries within the

(18:45):
EU don't want to see their national defense company whatever
it is, rolled up into something that is not stuck
to the nation. What happened in the early eighties such
that either countries or regions or companies that there was
this ability like discomfort with folding them all up or
who saw that vision like talk to us about like

(19:06):
this idea that look, there's a lot of publishing magazine
companies in every country. They don't all have to be
there are economies of scale to be had by integrating them.
Like where did that come from? Or who? How did
that get greenlit?

Speaker 6 (19:18):
Well, I think, you know, the nineteen seventies was a
really stagnant period. I mean I was in high school
in early years of college in that period, but it
was a really stagnant right. The Dow Jones was lower
kind of at the end of that decade than it
was at the beginning. So that's a long, difficult period.
And I think what you know, with Ron Reagan, with
a view that we're going to be more kind of
more real capitalism, we're going to you know, let capital
flow freely. We're going to reduce regulation, reduce taxes, all

(19:41):
that kind of stuff and try to get things to grow.
That that was kind of that spread around the world
to a fair degree. And now that I look back
as a nation we think about whether we want to
reverse globalization, I think back, like, what were the key events?
I would say number one the European Union really coming
together in a more meaningful way.

Speaker 5 (19:57):
Right, there's not a day they.

Speaker 6 (19:58):
Just said, okay, we're going to have a European Union.
It came and fits and starts, It got more integrated.
That euro was sort of formed as its own currency.
You know, I remember it because it happened right before
I moved to London from Morgan Stanley, when the Berlin
Wall fell. That really changed the attitude in Europe a
lot that Europe was not going to be a bigger,
more integrated place. There was a lot of opportunity economically,

(20:21):
you know, clearly China joining the World Trade Organization was
another big event. But I also think what drove it,
and this is maybe a little bit circular, but I
think it's true. I think this trillions of dollars worth
of m and A transactions that the more you did.
You know, it's like deals, baget deals. Right, if you're
a in an industry and you see one of your
competitors buy something that gives them a leg up, and

(20:42):
what you're doing, You're going to go out and try
to find something over your own. And so it kind
of fed on itself and obviously in the end created
a massive industry that really is focused on doing transactions.
And I was I was a part of that industry.

Speaker 3 (20:54):
Here's a very loaded question, but what percentage of M
and A transactions would you say are people based trying
to copycat their competitors and going, well, they did a
big M and A deal, I want to do it too,
versus how many are actually driven by rational strategic argument?

Speaker 6 (21:10):
Well, I think it's a little bit of both, but
I do think they're mostly driven by rational strategy, and
it makes sense. I think those broad strategic themes. I
think cause one company that's a bit more of a leader,
a bit more kind of proactive, will do something and
then it kind of wakes up the other ones that
they need to do something too. And you know, particularly
if you think about how technology has changed so many industries,

(21:32):
I mean, you know, take your industry, Take the media industry. Yeah,
I mean it's so called legacy media. Boy, they have
had a rough generation, not a rough couple of years,
like a rough generation. You know, Newspapers sort of largely
died except for a few like the New York Times,
and you broadcast TVs kind of sort of died. Cable
TV struggling, but.

Speaker 3 (21:49):
You know, you keep Podcasts are doing okay.

Speaker 6 (21:51):
Podcasts are doing okay. Streaming is doing more than okay.
So it's not that the business went away, it's just
that it evolved, and if you didn't find a way
to evolve with that, your company was going to get
left behind.

Speaker 2 (22:02):
I'm really interested in this idea of this sort of
like spread of Reaganism and this comfort with capitalism, and yeah,
the comfort with the realities of capitalism that your inefficient
company here might be better as part of something multinational
tied to. Was that something that like you could see
like you know, softening. You know, it's interesting one thing
that we should talk about. We're already seeing how a

(22:25):
sort of discomfort with globalization is killing deal activities. A
really good example is US Steel. The discomfort both the
Biden and the Trump administrations had with the idea of
selling that to Nippon Steel. But just talk about like,
was there a sort of like softening in the regulatory
environment everywhere is such that these agglomerations conglomerations were enabled

(22:45):
to happen.

Speaker 6 (22:46):
You know, I'll tell you a story that really makes
it seem in some ways even more cultural than sort
of legalist in the regulatory When I remember when I
went to Morgan Stanley in nineteen ninety again right after
the Berlin Wall had fallen, and just to paint a
picture Morgan Stanley's office, and we're in a rabbit warrant
of small offices behind the John Lewis Department store on
Oxford Street.

Speaker 5 (23:06):
Right.

Speaker 6 (23:06):
It was not in the City of London, which is
their version of Wall Street. It was not in Canary
warfolthough later it would be when that got built. It
was a very very small business. Goldvin Sachs was very
small over there too. But we were I literally look
back on and think, you know, we were a little
bit like missionaries. We weren't selling a religion, but when
we traveled the places like France and Germany and the
Nordic region and so on, the religion we were spreading

(23:28):
is that you should focus on shareholder value. Shareholder value.

Speaker 3 (23:32):
You heard the Good Book of Shareholders.

Speaker 6 (23:34):
Exactly because you know this this thing that we totally
came to take for granted about like what our corporation's for,
what is their purpose is Americans would tell you, and
I think now around the world they would tell you
they're largely for shareholder value. You can talk about different
constituents and so on, but I can tell you when
we went to talk to German, French and other companies
back in the early nineties, that was a novel concept

(23:57):
for them. You know that it wasn't just about building
a bigger and or prize, or surviving difficult times and
just building great resilience. It was about, wow, you can
actually focus on the goal of creating shareholder value. And
that is what drove I think M and A and
that M and A just kind of a virtuous circle
drove more of that thinking.

Speaker 2 (24:15):
Tracy, I have to say, you know, like I've been
so thoroughly enmeshed by the messianic message of shareholder value,
I almost have like a hard time imagining a world
in which companies don't perceive that, and governments and citizens
don't perceive that as the mission to make the stock
go up.

Speaker 3 (24:34):
Really Okay, well, here's my next question, and this is
the reason why I kind of asked you about the
post pandemic crisis. But it does feel like we are
in a somewhat different world and we now have a
president who I think everyone initially thought he was very
pro business, and we saw stocks of a lot of
smaller M and A boutiques go up, and stocks of

(24:56):
a lot of larger banks go up after the election
or around the election. They've since come down because a
lot of the measures, a lot of the statements coming
out of the Trump administration don't actually seem that business friendly.
And we have reports, for instance, of Trump telling companies
don't raise your prices too much to offset the tariffs
because you know, it's a political liability for him. That

(25:17):
seems to fly in the face of the mission of
creating shareholder value. Is this a new regime?

Speaker 6 (25:23):
It certainly feels like a new regime. I think company's
job is to try to figure out how can I
create or maximizes the word often used shareholder value given
whatever circumstances surround me, and those circumstances of both economic,
and they're also political, and they're also regulatory.

Speaker 5 (25:40):
But I do think one.

Speaker 6 (25:41):
Of the reasons that you see but just really a
remarkable amount of volatility right now. And you know, I
said I wouldn't use this word, but I'll use it
uncertainty that close, so.

Speaker 3 (25:50):
You made it about twenty minutes, twenty five minutes.

Speaker 6 (25:54):
It's clearly impacting markets. But you know, when I talk
about in my book, sort of the dowblow of a
thousand on I graduated college and it's forty thousand today,
I mean forty times gain. And I do feel like
a lot of that was driven by globalization. And I
think if that was going to be reverse, sort of
the untangling the strands of spaghetti that we've created in

(26:14):
sort of the corporate world, I think is going to
be very problematic. And that's why, you know, you hear
things like I think Secretary best and the other day
talked about how the current situation between the US and
China is unsustainable. I think a lot of business people
are thinking, yeah, it's unsustainable, and therefore they won't sustain it.
Yes they will, they will back off, but I'm not
sure that's going to happen. And nobody else is either.

Speaker 2 (26:37):
The bankers of these missionaries extolling the shareholder value mantra
around the world. What was the previous belief system in
place before that? If you're in a Germany, what is
the role of a company that that your vision superseded?

Speaker 6 (26:52):
I think that in many parts of the world, and
you know, even in America, really you had this sense
of just sort of the corporational an entity of itself
and had a life of its own, and its goal
was just to perpetuate itself. You know, there wasn't a
lot of M and A. I mean there was a
you know, of course I mentioned I started my career
at walk Taul Lipton, and you know, Marty Lipton, the
founder of that firm, was such a great spokesman for

(27:15):
this issue of the market for corporate control. That only
when you had the discipline of the market that said, essentially,
you're a CEO, you're a board, manage it however you want.
But if you don't manage it well, your stock price
will go down and we will buy you and then
you will be out of jobs and we will take
over and we will run it better than you do.
And that market for corporate control created a discipline on

(27:39):
companies that they had to try to maximize shareholder value
because if they didn't do that, they would get bought.

Speaker 4 (27:45):
Yeah, green Hill got bought.

Speaker 3 (28:02):
Can we talk about that deal a little bit, because
we've been meaning to do an episode on the sort
of rise slash return of Big Japan I guess, and
we've never quite gotten around to it. But obviously, you know,
Mizuho coming in buying a company like Green Hill for
I think it was five hundred and fifty five hundred

(28:22):
fifty million. A lot of people were saying at the time,
this is, you know, another big Japanese bank trying to
make a splash in overseas markets. Maybe it's about the
idea that given tensions between the US and China, there's
going to be more opportunity for deal making by Japanese companies.
There were all these sort of strategies attached to why

(28:42):
this deal was being done. You were directly involved with it,
I assume what was your interpretation of what was going on.

Speaker 6 (28:50):
The book certainly tells the story of the evolution of
our industry. Again, going back, we were a pretty unique
business for a long period of time. There were lots
of the whole chapter, and there are about all the
many firms that followed us, particularly once our IPO not
only was the success, but quadrupled in't share price over
the first eighteen months, so we worth two billion dollars
and still not many more than one hundred people, including

(29:10):
you know, the receptionists and everybody else.

Speaker 5 (29:12):
So the sector.

Speaker 6 (29:13):
Got more crowded, right, there were more players, And I
thought what made our firm so successful at the beginning
was we had a different strategy. And so you always
have to think about what's the right strategy, not for
the last five or ten years, but for the next
five or ten years. And so having had many many
opportunities to sell the firm over the years and really
not showing any interest in any of them.

Speaker 5 (29:32):
I talk about a lot of.

Speaker 6 (29:33):
Them in the book. There are many of them that
are spelled out there. But I never had any interests
at all, really didn't even have much of a serious
meeting with anybody. But you know, the Mizuho people, through
an intermediary, approached me, and again I had no interest,
took my typical stance, and I just started to rethink things,
you know, coming out of kind of the latest pandemic crisis,
you know, seeing the industry go through another difficult time. Also, frankly,

(29:57):
you know my own personal situation. I mean, I thought
about subtitles for the book that would be something like
life cycles of Wall Street firms and the people who
run them, because you know, we don't go forever either,
And I thought, you know, for the next chapter of Greenhill,
I think being part of a strong global international bank
like Mazuha would be good. So six months after they
said would you have a cup of coffee? I sent

(30:20):
Mac a message through that intermediary saying yes, I would
have a cup of coffee.

Speaker 2 (30:24):
If the purpose of a corporation is to create shareholder value.
For a boot Seek investment bank, why do shareholders get
to split the value? If you why even bring shareholders in?
It's not a capital intensive business the people creating the margin.
Why isn't it just run for the bankers? And actually

(30:45):
this is a criticism in fact of like investing in
investment banks. It's like, no, the bankers capture all the margin.
Why even have shareholders?

Speaker 6 (30:53):
Well, here is sort of the dirty little secret of
the IPO market, which is if you want to crystallize
and collect shareholder value.

Speaker 5 (31:04):
A very good way.

Speaker 6 (31:05):
Of doing it is to take your company public. We
were the first of our kind to do that. So
ideas sort of came to me one summer when I
was doing work for a client in an unrelated industry
and I thought, I wonder if we could go public.
We decided, if we had one more good year, we're
going to do that. So on January second, two thousand
and four, I called up Golden Sachs and others and said, hey,
would you consider taking us public? And that's a great

(31:25):
way to crystallize value, realize all I worked out great
for our early founders. For sure, being a public company
is not nearly as much fun as going public, you know,
And in fact, I mentioned in the book part of
my thought process when I ultimately decided that we would
sell become part of Mizuho. You know, the number of
publicly traded companies in America in the lifetime of our
firm fell in half. And part of that is investment

(31:48):
funds want to invest in bigger, more liquid stocks, and
part of that is there's more regulatory hurdles to being
a public company, and so it declined a lot. So
sometimes people say to me, that really is difficult being
a public company. Do you regret that? I'm like, no,
I don't regret that because we all made a lot
of money by going public, and by the way, I
had a lot of fun as well, so that was
all good. But I think for many companies, and the

(32:09):
reason you often see companies go public, be public for
some number of years, maybe get taken private by a
private equity fund, and then what happens three to five
years later, they take it public again, maybe in a
slightly different form. So that's the kind of ying and
yang of the IPO market, which is that it's not forever.
You tend to do it for a period.

Speaker 3 (32:28):
Wasn't the argument. Also, if you're a partner at a
boutique M and A for you have sort of equity
in the business, some sort of partnership stake. But if
you IPO, then you basically trade that illiquid equity for
something that's public and quite liquid that you can monetize well.

Speaker 6 (32:45):
And even more so that's all true, but even more
so if you were a partner of Gold and Sachs
before it went public about five years before we did,
when you retired or sold your effectively sold your shares
back to the firm. You got paid out of book value.
You know, the day at went public, I think think
in public a like three times book or something like that.
So suddenly overnight the value what you had tripled. You

(33:06):
can read historyes of Gold and Sachs kind of like
my book is a bit of a history of the
industry and see some of the tension over the years,
because you had generation after generation of partners who would
reach retirement and get cashed out of book. And then
along came one generation that decided, We're not going to
get cashed out of book. We're going to do something different.
And that's kind of the calculus we made as well

(33:26):
at Greenhill. I mean, there was a long history even
before our firm, of smaller boutiques that eventually got sold.
They would sell out to a bigger bank, and I
wanted to keep us independent. I thought we could go
a long way and build a big global firm and
all that sort of thing. And so I thought, really,
one summer, I just thought, I wonder if instead of
crystallizing value by selling the firm, I wonder if we

(33:48):
could go public.

Speaker 2 (33:49):
Let's talk a little bit more about the contemporary environment
and the prospect of deglobalization. The initial COVID supply shock
obviously woke up a lot of countries at least in
key strategic sectors or whatever, to have their own capacity.
Then the war in Ukraine further dividing the world among
multiple lines. Now the tensions with China specifically, but also

(34:13):
maybe with every other trading partner, including Japan, And talk
to us about like, what's emerging potentially from your perspective
in the place of the ideology that you preached throughout
most of your career.

Speaker 6 (34:26):
Yes, it is different change from just the kind of
the pure shareholder value. We don't care where our plants are,
we don't care where our customers are. We just want
to have the right configuration to maximize shareholder value. If
you or your government has to start thinking about, hey,
maybe we want to have some of our own capability
in that field, it really changes everything. I mean, here's

(34:47):
a really simple example. If you are running a country
that's in a climate that's not you know, the greatest
place to grow food, you probably want to grow some
of your own food. Nonetheless, you know, maybe more expensive,
maybe more difficult, but you probably want to have some
of your own supply. What's now being talked about is
maybe that's true in a whole bunch of things. Maybe
that's true of you know, pharmaceuticals. Maybe that's true of

(35:08):
our defense products. Maybe that's true of all the electronics
that were we all, you know, live with every single
day of our lives. And if you start thinking that way,
I think it will quickly lead to countries saying I'm
not sure we want to allow this foreign company to
buy our you know, wonderful company here, because if we
will lose control of that production. And I think if

(35:29):
you start to think broadly as a government, you could
convince yourself that in almost every industry you'd like to
have some of your own capability.

Speaker 2 (35:37):
I just you know, this came up on a recent podcast,
But the administration recently talked about how much we import
in textiles and clothing, and it's just like, this is
not a strategic sector. Particularly, this is not a sector
associated with high margins or high value jobs. So to
Scott's point, Tracy, yes, countries could suddenly start to convince

(36:00):
themselves that every sector of the economy needs to have
domestic capacity.

Speaker 3 (36:04):
Why is the US not growing its own silkworm supply
for bananas or bananas or mangoes or avocados. These are
the big questions.

Speaker 5 (36:13):
We love guacamole in this country.

Speaker 3 (36:14):
Were avocados we do indeed? Okay, So if we're in
a period of heightened protectionism slash deglobalization, what exactly should
M and A advisories actually do the deal makers? Do
you start focusing on restructurings instead. I know Greenhill did
a lot of restructurings post two thousand and eight.

Speaker 6 (36:33):
Yes, a lot, almost really all the M and A
advisory bootooks really added restructuring capability because you figured it
out pretty early that when MNA is really slow, there's
a lot of restructure going to be done this cycle.

Speaker 5 (36:44):
Though I'm not.

Speaker 6 (36:45):
Sure that it necessarily shifts into a lot of restructuring
because it's not like the economy is that bad. And
maybe it gets there, of course, but I think you know,
what you're seeing in the statistics year to date certainly
is that there has been considerably less M and A.
I mean, somebody told me the last month some data
was showing that it's like the slowest month and you
know in many, many years, And so I think we're
not yet in a period. I don't think of deglobalization,

(37:08):
but we certainly are on the brink of one. And
if the tariffs you know, really got solidified at significant levels,
I think that would perhaps create some.

Speaker 5 (37:17):
M and A opportunities.

Speaker 6 (37:18):
I don't think as many as the under the old
religion of free trade and shareholder value, but I think
it'll create some. I mean you'll need you know, European
companies that sell in the US might think, okay, we
need to have manufacturing capability in the US to service that,
and like vice versa, US into Europe and US and
to other parts of the world as well. So there's
always this n M and A banker. Again, whatever the

(37:40):
rules are, you can find deals that make sense. The
thing is, right now people don't know what the rules are,
so they can't quite do that.

Speaker 2 (37:47):
How much is it simply rolodex knowing the person to
call it, knowing the person to get the communication with
someone else, And how much does that value compound over
time such that of veteran deal maker has a sustainable
edge over a junior deal maker simply by dent to volume.

Speaker 6 (38:08):
Certainly the role of decks or the electronic equivalent there
always is very very important. I mean, if you think back,
you know, it's interesting again about the evolution of the industry,
which is so fascinating that was so small and became
so big. You know, initially very few people were in
the business, and a person like say Bob Greenhill found
at our firm. I mean, he had a huge market
share by himself. You know, I'm not talking Morgan Stanley's

(38:28):
market share, like his market share, and there are a
few other guys that had had sort of the same
thing and they did everything. You know, today, we're doing
a paper deal. Tomorrow, we're doing a computer deal. Day
after that, we're going to do an energy deal. You know,
what happened as the industry grew is that firms realize
that to create a competitive edge and trying to win business,
you should be a specialist. And at first they thought, okay,
you're going to be a healthcare specialist, and then later

(38:50):
that got broken down to well, that's not narrow enough.
You've got to be either a biotech or a pharma
or a healthcare devices or a hospital management expert. And
so you create all these like subspecialties where people may
not be a household name, they may not ever, you know,
get their name in the Wall Street Journal or something,
but they may be the leading m and a expert

(39:11):
on a niche within healthcare, within technology, within industrials that
builds a great business for them. So it's kind of
a narrow but deep roll index people try to build.

Speaker 3 (39:20):
Now, speaking of household names and the Wall Street Journal,
this is actually something that I wanted to ask you about.
So when I first got your book, I immediately went
to the index and I looked up every media organization
name and then read what you said about Bloomberg coverage,
Financial Times coverage, Reuter's coverage, and one line that I
thought was interesting is you had a criticism of one

(39:40):
of the news stories where you said that you know,
it was a news publication that was making out that
the departures of some of your bankers wore a bigger
deal than they actually were. And you make the point
that while outsiders can't really tell the difference between whether
or not you know someone who's leaving is a huge
deal in their industry or not, what advice do you

(40:04):
have for financial journalists who are trying to figure out
whether or not this particular guy is a big deal.
Slash rain Maker in his particular.

Speaker 6 (40:12):
Niche Well, first of all, I was hoping you wouldn't
go to the indexing work for your company. By the way,
huge fan of Bloomberg, Thank you. You know the point
I made. And a whole chapter is titled from a
comment that was somebody made on Bloomberg once. But I
think what I've talked about a lot in the book
is is my relations and the firm's relations with the media.
And you know, and on the way up, boy did

(40:33):
they help us. I mean it was incredible the way
they fed this sort of brand building and to kind
of each story added to the luster and helped you
in the next piece of business, and that piece of
business got you another good story, and then it just
was a beautiful, virtuous circle. But the media relationship gets
more complicated as time goes on. You know, the media,
I think sometimes has a tendency to both want to

(40:54):
build entities or people up a lot, and then it's
kind of really interesting if you can sort of tear
them down as well. So, you know, I had my
complicated relationships with the media, and I think it's hard
for them to know from the outside. I mean, there's
a whole as you well know, there is a whole
industry of advisors out there who are trying to help companies,

(41:15):
you know, to some degree, fool you right, to some degree,
put the you know, the lipstick on the pig, to
put the right spin on whatever happened yesterday, to make
the quarter sound better than it probably was. So I
think you've got a hard job.

Speaker 5 (41:27):
I mean, I think.

Speaker 6 (41:28):
Look, I think Bloomberg does it well, and so do
some others FT. Wall Street Journal, et cetera. Do a
nice job, but it's not easy to ferret through what's
the real story on a quarter or an M and
a deal or whatever news there is.

Speaker 3 (41:40):
Thank you, I appreciate that empathy.

Speaker 2 (41:42):
What do deals leak? What is the most common reason
that a deal might leak to the media? Early, I
don't understand why anyone talks to reporters. I'm very glad
that some people seem to be willing to talk to
the media, but I never really get it. I would
never Why do deals leak and what is the most
common source of leaks.

Speaker 6 (41:59):
That I'm happy to say is a mystery to me.
Certainly they never leaked for me. Part of the argument
going back to why the so called boutique investment banks
did quite well for a long time. I mean, part
of the pitch we made was if you care about confidentiality,
wish every company does when they're kind of secretly hatching
some deal is that if you have a small team,
small firm involved, you're less like a have a leak

(42:21):
and they have a big team, big firm involved. Sense
And you know, we used to point out that, you know,
if you imagine you know, the biggest, the Golden Sacks,
the JP Morgan, Like, just how many compliance people would
even have to hear about a specific deal before they
got approval to lend the money, to give the advice
and things like that, And so it's just a it's
a numbers game in some way. But look, it's illegal
to leak information on public deals, and it's surprising that

(42:45):
somehow it happens. And of course there have been insider
trading case as well, which is another form of abusing
client information that you have proud to say, Greenhill, we
never had an insider trading case, So I'm very pleased
with that.

Speaker 3 (42:57):
Can I ask you a personal question?

Speaker 5 (42:58):
Sure?

Speaker 3 (42:59):
So there's a moment in the book where you talk
about how you're fifty one years old and about to
go on your first ever two week vacation, which is
kind of shocking. What's work life balance like? Are you
happy with the choices you made in your career? Would
you advise young students to consider going into investment banking now?

(43:21):
Is it better in terms of work life balance?

Speaker 5 (43:24):
I'm not sure it's better. I mean I feel that.

Speaker 6 (43:27):
Look, that story is true because I always felt like,
especially in the firm's early years, I played a pretty
central orl even before I was the CEO, because Bob
Greenhill was the guy. I loved to do deals and
didn't really like to manage. So I didn't feel like
I could be away very long, and so I would
take one week vacations. But now, I mean, personally, I
feel like I've got good work life balance. But everybody
has to work it out in their own way. I mean,

(43:48):
you know, I'm married to the same woman for forty
three years. That's got to say something. You know, I
think I didn't miss any of my kids, you know,
sports or other theater activities and so on, and you know,
and probably at the peak, my wife and I saw
maybe fifty Broadway shows a year.

Speaker 5 (44:02):
You'll know, that you see. You'll see many references to
Broadway shows.

Speaker 2 (44:06):
There was there a client who came along or.

Speaker 6 (44:09):
In some cases but mostly but mostly us. You know,
you just say, you know, so I found my work
life balance. But the one balance I didn't have was
like long vacations, because I just didn't feel like I
could be away that long.

Speaker 3 (44:20):
Well, it's funny because even in that anecdote, you end
up on a call. I think you went on safari to.

Speaker 5 (44:24):
Africa, on the coast of East coast Africa. There's no
such thing.

Speaker 2 (44:28):
As a vacation when you're an adult and you have
a job. I mean, I've taken no, no, no.

Speaker 3 (44:32):
The real vacation is when you take gardening leaf between jobs.
If you're lucky enough to get that, that's when you
can actually relax.

Speaker 2 (44:39):
This is the best time to change jobs. And iwa say
this once. There's no such thing as vacation. If you
have a serious job in a place you could maybe
not look at your email for a few hours.

Speaker 6 (44:48):
Yes, can I just say one thing more about that?
It's just another little anecdote, And boy is that true.
I mean, and this is one of the things that
ultimately gets you to think you know, maybe there's a
life after this, and I should think that it is
time to sort of respond to one of these increases
to buy the firm. But you know, I also talk
in there about you know what deal that we worked
really hard on, fabulous deal, wonderful about to be announced.
And you know, and I meant, like at the at

(45:09):
the intermission of a play with my kids in the country,
sort of rural Berkshire, you know, summer theater thing, and
and you get this call that the thing died, I mean,
and you have to by saying the book that you
you know, your job then is like we don't ruin
your family's day, you know, keep your game face on
and just keep moving. But you know, you're right, the
bad news can come at any minute. It can come

(45:30):
at five in the morning when you just woke up.
It can come and you're at the you know, the
intermission of a of a show. It can come in
the middle of vacation. And that's a bit the price
you pay to be in this industry.

Speaker 2 (45:39):
In recruiting these days, for bankers, is it as important
to say go to one of the best schools. You know,
people think about where their kids are going to go
and or like, you know, is it fine if someone
goes to University of Indiana or University of Mississippi or
something like that, Like how important is that pipeline? When
you think about the industry today recruiting of young bankers, I.

Speaker 6 (46:02):
Think a good thing is that it has become much
more democratic in terms of this opportunity from almost everywhere.
I mean, you mentioned Indiana University actually haven't have a
great undergraduate business school, and they've sent a lot of recruiteduation. No,
but it used to be when I started out. I mean,
I think at Morgan Stanley we recruited at very few
schools under read or even fewer NBA schools, and and

(46:24):
at green Hill was kind of the same way. But
over time, and partly because the industry needed so much talent,
you know, then you sort of started going to the
big ten, and then you start going to the smaller
liberal arts schools, and you start going to the Southeast schools,
and and now I think young people who you know,
who work hard, who take enough of the stems stuff
to be able to do the math, to be a banker,
they can come from almost anywhere and build a great career.

Speaker 3 (46:46):
So I think you told one of our fellow journalists,
Sujit Endapp, who has actually been on this podcast as well,
but you described your role on Wall Street as kind
of like being Forrest Gump, so not necessarily the most
important guy in the room, but someone who had a
front row seat to all these really big moments in

(47:06):
financial history. When I think of Forrest Gump, I think
of how surreal a lot of those scenes are, and
you know, Forrest Gump in the White House and things
like that.

Speaker 5 (47:15):
With MLK and the Washington That's right, What.

Speaker 3 (47:18):
Was the most surreal moment for you looking back on
it all?

Speaker 6 (47:23):
Wow, it's really hard to pick out one, I would say.
I mean, it's funny I flippantly came up with a
Forrest Gump line because, you know, because I think I'll
tell you.

Speaker 5 (47:32):
I'll tell you.

Speaker 6 (47:33):
One thing I think got my career ahead is I
didn't feel like I always needed to be the most
important guy in the room, and so I was happy
to let you know, Bob Greenhill's a generation old to
me be a more senior, more important guy. And by
the way, if you stay in the advisory business, I mean,
your client should always be more important than you, so
you have to kind of subordinate yourself to the CEO,
the chairman of the board. I mean, you're whispering in

(47:53):
the ear, You're giving them great advice. Often you're giving
that advice to the whole board. But it's not all
about you. You know, it's supposed to be about the client,
subjective and so on. So, you know, lucky for me
being at the firm i was at, I did end up,
almost like Forrest Gump, being in an interesting spot for
the dot com crash, the financial crisis, nine to eleven,

(48:13):
the COVID. I mean, I sort of saw all those,
and you know, I'm not sure what I would pick
with the most surreal, But that's a that's a really
good question, because there were a lot of them where,
you know, where you just kind of can't believe you're
you're there at kind of this critical, kind of pivotal
moment during one of these crises.

Speaker 2 (48:29):
There is this backlash to globalization happening. There is people,
there's on many levels, there's the security concerns. People feel
a certain sense of sadness that like, you know, the
local potato chip maker got bought and is now part
of Free Too Lay or whatever, and that brand that
they loved as a child, and like I get you know,
these things that you describe which were sort of pivotal

(48:52):
to this expansion of the global economy and so forth.
Do you have any regrets or change of perspective on
some of these questions over time about the sort of
the zeal with which many people were spreading the shareholder
value mission and the sort of perhaps understandable loss of
like their local environment, what made their area distinct, et cetera,

(49:14):
when you look back over it, what is your perspective
on that?

Speaker 5 (49:17):
Look?

Speaker 6 (49:17):
I think an interesting book for somebody other than me
to write would be where do we go next? In
what I would call the whole transaction ecosystem? Because I
know when I started out, I mean I talked about
how the nineteen seventies, again I was a very very
young person then was kind of a stagnant decade, really
very little economic growth, very in the you know, stock

(49:37):
market growth, et cetera. I think the country needed a
real jolt of energy and activity and kind of a
market for new shareholders to take over companies and run
them differently. You know, at some point there's got to
be diminishing returns on that and we now have this
huge industry of lawyers and bankers to sort of do
that kind of thing, and you know, I think it's

(49:58):
a legitimate question should there be some constraints on that.
So that's a question to be answered for the future.

Speaker 2 (50:04):
I think Scott Boch the book is Surviving Wall Street,
a tale of triumph, tragedy and timing. Thank you so
much for coming on Odd Life. That was fantastic, Thank you.

Speaker 5 (50:13):
I really enjoyed it. Thank you, Tracy.

Speaker 2 (50:27):
I really liked talking to Scott, and there's a lot
in there, but just this idea of bankers as the
missionary of a sort of shareholder value thinking about corporations
and capitalism, super interesting thing to.

Speaker 3 (50:40):
Think about, absolutely, and coming with their talking points about synergy.

Speaker 2 (50:44):
Oh yeah, totally.

Speaker 3 (50:45):
The other thing I was thinking of.

Speaker 2 (50:47):
So economies of scale, that's right.

Speaker 3 (50:50):
One thing I hadn't considered.

Speaker 1 (50:51):
You know.

Speaker 3 (50:51):
He talked about how low share prices can be like
a form of discipline on corporate management, because if you
have a low share price, than someone's going to start
eyeing you and going, well, we could just buy that thing,
and then you're probably going to be ousted as management.
I hadn't really considered that. But it is true.

Speaker 2 (51:10):
Yeah, no, it's totally true. And it's a hard constraint
on the ability of any management team to prioritize anything
of the shareholder value. So it's like, I'm sure you
know they'ah like, well, we want to keep people employed
in this country because we've always had a history in
this country. Well, if that's not profitable, productive employment, it's
going to be a drag on your stock price. And

(51:32):
you create the opportunity for one of your competitors to
buy you, and then they're gonna they who have no
emotional resonance with this place, they'll do the hard job
of laying off the workers. And I get why. You know, frankly,
it's not surprising to me why there are individuals and
businesses and politicians who want to curb that.

Speaker 3 (51:54):
It all comes down to incentives, doesn't it. That's really
what drives everything. All right, shall we leave it there,
Let's leave it there. This has been another episode of
the Odd Lots podcast. I'm Tracyalloway. You can follow me
at Tracy Aalloway.

Speaker 2 (52:05):
And I'm Jill Wisenthal. You can follow me at The Stalwart.
Check out Scott's book Surviving Wall Street, A tale of triumph,
tragedy and timing that's now out. Follow our producers Carmen
Rodriguez at Carman armand dash Ol Bennett at Dashbot and
Kilbrooks at Kilbrooks. For more Odd Loots content, go to
Bloomberg dot com slash odd Lots, where we have a
daily newsletter and all of our episodes, and you can

(52:26):
chet about all of these topics with fellow listeners twenty
four seven in our discord Discord dot gg slash odlog.

Speaker 3 (52:33):
And if you enjoy Odd Lots, if you like it
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Thanks for listening

Speaker 4 (53:10):
In