Neil Sedaka famously sang that breaking up is hard to do, and wealth management firms have certainly had their share of rough changes of leadership.
Overspending, backstabbing, family intrigue and just plain surprise resignations can all play a part when it comes to cutting ties with a chief exec.
Of course, not every tenure ends with days or months of headlines breathlessly reporting the latest twists and turns. One firm has generated headlines for its ability to keep a secret while maintaining an air of calm, while it plans its succession.
To find which firm that is, look at our list of 5 Messy Financial Firm Breakups, and One Keeping Mum:
1. Mohamed El-Erian, PIMCO: 2014
Wall Street might have been shocked in January when El-Erian, the CEO and co-CIO of the bond giant, announced he would leave, but Bill Gross, the company’s founder and co-CIO, was having none of it. In fact, by early February Gross let the world know “we are a better team at this moment than we were before.” Time will tell.
2. Ronald O’ Hanley, Fidelity Investments: 2014
After El-Erian announced his split from PIMCO, O’Hanley let it be known he would leave his post as Fidelity Investments’ head of assets. Maybe it was expected. Some industry experts said being No. 2 at the family-run company was never a long-term assignment. So maybe all we can do is warn the next manager up. For O’Hanley’s part, he said he had accomplished his goals of aiding Abigail Johnson as she took over the company from her father and improving asset management at the firm.
3. John Mack, Morgan Stanley: 2001 and 2010
There might have been a handshake agreement that Mack would someday take the helm at Morgan Stanley, but it wasn’t to be. Chairman and CEO Philip Purcell, who had landed as Mack’s boss after his Dean Witter bought out Morgan Stanley, didn’t have any thought of leaving. After a tempestuous relationship, Mack finally left in 2001, three years after his co-CEO proposal was rejected. Morgan Stanley denied there was ever a handshake agreement.
Mack went on to two other firms before getting his revenge: in 2005, he was named to replace Purcell at Morgan Stanley. In 2007, he received $41 million in pay. Things had soured by 2009 as Morgan Stanley took some of the blame for the financial crisis. Mack stepped down on Jan. 1, 2010.
4. John Thain, Bank of America Merrill Lynch: 2009
As head of Merrill Lynch, John Thain had a job many in the financial industry envied. And those who worked for him probably thought he was a good boss. Who wouldn’t want to work for a boss who hands out big bonuses even when the firm is bleeding money? After Bank of America took over the venerable firm, those bonuses to top executives led to his ouster in 2009. Thain turned a debacle into a victory by taking over the helm of CIT Group barely more than a month later and returning it to profitability last year from the depths of a $31 billion debt.
5. Jeffrey Gundlach, TCW Group: 2009
It’s not often that being fired is cause for an expensive party, but that’s how Jeffrey Gundlach reacted when he was let go by TCW in 2009. Gundlach was a master of fixed income investments and his portfolio was half of the company’s assets. Accusations that he was stealing company secrets to start his own fund led to his firing. Suits and countersuits followed. Out of the controversy, Gundlach created DoubleLine Capital, which has $50 billion in assets under management.
6. Warren Buffett, Berkshire Hathaway: ????
There’s no internal controversy here. No messy board fights. Matter of fact, the successor chosen by Warren Buffett, the “Oracle of Omaha,” is completely unknown; the big man says he is solidly in agreement on the choice. Most observers expect the next head of the investment company to come from within.
The only things we know for sure is that there will be a successor. How do we know that? Well, the Oracle said so. Anyone who thought he’d stay forever has been warned.
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