John J. Mack

John J. Mack
Born	November 17, 1944 Mooresville, North Carolina, U.S.
Nationality	American
Alma mater	Duke University
Occupation	Banker
Years active	1967-present
Known for	Chairman, Morgan Stanley (Jun 30, 2005 - Jan 1, 2012) CEO, Credit Suisse (2001 - 2004) CEO, Morgan Stanley (Jun 30, 2005 - Jan 1, 2010) Senior Advisor, KKR (2012-present)
Spouse(s)	Kristy Mack
Children	3

John J. Mack (born November 17, 1944) is a Senior Advisor and the former CEO & Chairman of the Board at Morgan Stanley, the New York-based investment bank and brokerage firm.^[1][2]

Early life and education

Mack was born in Mooresville, North Carolina, the son of Alice (née Azouri) and Charles Mack. Mack's father's original family name was Makhoul; he came to the United States from Lebanon when he was 12 years old, following Mack's grandfather, who had arrived at Ellis Island in 1909.^[3]

The family settled in North Carolina. Mack's father ran a wholesale grocery, clothing, and general merchandise store called John Mack & Son in Mooresville, North Carolina.^[4] The business occupied The John Mack Building from 1937 to the 1990s.^[5] Mack is the youngest of six sons. The family was Catholic.^[6]

In 1968, Mack graduated from Duke University, where he attended on a football scholarship and majored in history. Mack's first job in finance was as a clerk at a small brokerage house during his junior year at Duke, after a cracked vertebra made it impossible for him to continue on his football scholarship.^[6]

Career

Morgan Stanley

Mack worked at several firms around Wall Street before starting his career at Morgan Stanley in 1972 as a salesman, and has since worked for the company for nearly thirty years. Rising steadily to positions of increasing responsibility, Mack eventually headed the firm's Worldwide Taxable Fixed Income Division from 1985 to 1992.^[7] In 1987, he became a member of the board of directors. In March 1992, he assumed responsibility for Morgan Stanley's day-to-day operations as chairman of the operating committee. He was named President of Morgan Stanley in June 1993. Mack served as president, chief operating officer and a director of Morgan Stanley Dean Witter & Co. from May 1997 when the firm was created by the merger of Morgan Stanley and Dean Witter, two of the world's leading financial services companies.^[8]

In 2001, Mack left Morgan Stanley after a power struggle with Phil Purcell; Purcell became CEO of Morgan Stanley after the 1997 merger of Morgan Stanley and Dean Witter, of which Purcell was already CEO.

Credit Suisse

Six months later, in June 2001, Mack was hired as CEO of Credit Suisse, then known as Credit Suisse First Boston (CSFB).^[9] Mack's time at Credit Suisse was marked much restructuring and by compliances issues created by Frank Quattrone's Technology Group.^[10]

Morgan Stanley redux

On June 30, 2005, Mack returned to Morgan Stanley as Chief Executive Officer and Chairman of the Board, replacing Purcell.^[11][12] Mack was noted for stabilizing the firm and reenergizing its culture and client franchise,^[13] despite an economic downturn.^[14]

Mack announced his retirement as Chief Executive Officer on September 10, 2009, which was effective January 1, 2010.^[15] In 2011, Mack retired from Morgan Stanley^[16] after more than 30 years as an investment banker.^[17] Former Co-President James P. Gorman succeeded him as CEO.

Kohlberg Kravis Roberts

In 2012, Mack joined Kohlberg Kravis Roberts as a Senior Advisor.^[18][19]

Rosneft

In 2013 Mack joined Rosneft, the Russian, state-owned, oil company that has BP as an investor of approximately 20%. In 2014 he announced his departure,^[20] shortly after the CEO Igor Sechin had sanctions imposed upon him by the US. Different reasons were given for his departure; Mack said his contract had only been for a year, while Rosneft spokespeople said he had decided to leave for personal reasons.

Insider trading accusations

In 2006, Mack was accused by former SEC investigator Gary J. Aguirre of insider trading.^[21][22] On October 5, 2006, the SEC recommended no action be taken against Mack. In late November 2006, Mack and Pequot were notified that the investigation had been closed and no action would be taken against them.

Compensation

While CEO of Morgan Stanley in 2006, John J. Mack earned a total compensation of $41,399,010, which included a base salary of $800,000, stocks granted of $36,179,923, and options granted of $4,019,934.^[23]

In 2008, he earned a total compensation of $1,235,097, which included a base salary of $800,000 and other compensation of $435,097. He did not receive any cash, stock, or options.^[24]

In 2014, Mack defended the high fees paid to CEOs,^[25] saying on Bloomberg Television that the discussion of compensation was healthy, but that CEOs earn the rates.^[26]

Financial crisis of 2007–2009

Mack guided the firm through the financial crisis of 2008,^[27] building its capital position and overseeing the firm's conversion to a bank holding company. To stabilize the firm, he forged strategic alliances with China Investment Corporation and Mitsubishi UFJ Group and entered into a joint venture with Smith Barney, forming at the time the world's largest wealth management firm. During the crisis, Mack was advised by U.S. Treasury Secretary Hank Paulson and the head of the Federal Reserve Bank Ben Bernanke to sell Morgan Stanley. He has stated that during negotiations he was under considerable pressure from the president of the New York Federal Reserve, Tim Geithner, to sell or merge Morgan Stanley to one of his competitors such as JP Morgan.^[28] Mack saw this as being contrary to the interests of Morgan Stanley shareholders and employees, similar to the demise of Bear Stearns in a forced sale to JP Morgan for $2 per share, (the deal was later revised to $10 a share), and insisted on finding other sources of financing instead.^[29]

Board memberships

• New York-Presbyterian Hospital: Chairman of the Board of Trustees^[18][30]
• Duke University: Board of Trustees
• University Hospital of Columbia University: Board member
• University Hospital of Cornell University: Board member
• IMG: Director
• Bloomberg Family Foundation: Board member^[18]
• Business Council: Member
• Business Roundtable: Member
• China Investment Corporation: International Advisory Council
• Mayor of Beijing: International Business Leaders Advisory Council
• Monetary Authority of Singapore: International Advisory Panel
• Partnership for New York City: Executive committee, Director
• November 2011: Rev Worldwide: Board of directors^[31]
• 2012: LendingClub: Board member^[32]

Philanthropy

Mack has donated to various entities through the Christy and John Mack Foundation, formerly known as C.J. Mack Foundation:

• 1999: Duke University: $10 million to support various initiatives^[33]
• 2004: Duke University: $10 million to support integrative medicine^[34]
• 2005: United States Naval Academy Foundation: Endowment to support the Admiral Frank Bowman Scholar Program
• 2007: Shaw University: $5 million to support academic scholarships to this historically black college^[35]

In media

Mack earned the nickname "Mack the Knife" for his cost-cutting prowess while managing the fixed income division at Morgan Stanley, and he lived up to his billing at CSFB, where he cut 10,000 jobs and returned the bank to profitability.^[36]

Mack was portrayed in the HBO film Too Big to Fail by Tony Shalhoub and in the BBC film The Last Days of Lehman Brothers by Henry Goodman. His career is also covered in detail in a 2007 book by Patricia Beard, Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley.

Selected interviews

• Mack, John. "Wharton Leadership Lecture: John Mack on Saving Morgan Stanley, Inside the Bunker." Knowledge at Wharton. University of Pennsylvania. October 14, 2009.^[37]
• Mack, John and Hank Paulson. "Mack, Paulson full interview." CNN Money. NYU Stern School of Business. March 2010.
• Rose, Charlie. "Zhou Wenzhong; John Mack, Chairman, Morgan Stanley; Kenneth Roth on Human Rights in China; An appreciation of Reynolds Price." Charlie Rose. January 20, 2011. Interview starts at 25:30.

Personal life

Mack is married to Christy Mack (née King). They have three children.^[38]

References

1. Angelova, Kamelia (14 September 2009). "The Legendary Career Of John J. Mack". Business Insider. Retrieved 12 November 2015.
2. Pressler, Jessica (8 April 2012). "Look Who's Back: John Mack is no longer at the top of Morgan Stanley. So he's getting his fix elsewhere". New York. Retrieved 12 November 2015.
3. Thomas Jr., Landon (1 August 2006). "From Lebanese-American Financiers, Differing Views on the Strife". The New York Times. Retrieved 12 November 2015.
4. "Madeline Mack (1914-2006)". Mack and Mack Clothing. Retrieved 13 November 2015.
5. "Mooresville Historic Walking Tour" (PDF). Town of Mooresville. Retrieved 13 November 2015.
6. "John J. Mack". The Horatio Alger Association. Retrieved 12 November 2015.
7. Carney, John (8 December 2011). "Morgan Stanley Bids John Mack Farewell". CNBC. Retrieved 11 January 2016.
8. Barboza, David (6 February 1997). "Veteran Executive Is 'Tough And Direct'". The New York Times. Retrieved 12 November 2015.
9. McGeehan, Patrick (27 January 2002). "His Rallying Cry at First Boston: Smaller, Cleaner, Fairer". The New York Times. Retrieved 12 November 2015.
10. Sellers, Patricia (1 September 2003). "The Trials of John Mack". Fortune. Retrieved 13 November 2015.
11. "Morgan Stanley's Mack Attack". Business Week. 20 June 2006. Retrieved 13 November 2015.
12. "John Mack Elected Chairman and CEO of Morgan Stanley". Morgan Stanley. 30 June 2005. Retrieved 12 November 2015.
13. Bizouati, Yaël; Basar, Shanny (6 April 2009). "Was Purcell right about Morgan Stanley after all?". Financial News. Retrieved 12 November 2015.
14. Bowley, Graham (22 July 2009). "Red Ink Stains Bank and Banker". The New York Times. Retrieved 12 November 2015.
15. McFadden, Jeanmarie; Charnas, Suzanne (10 September 2009). "Morgan Stanley Announces CEO Succession Plan". Morgan Stanley. Retrieved 12 November 2015.
16. Levin, Bess (8 December 2011). "John Mack: If I Wasn't A Banker, I Would Have Been A Women's Shoe Salesman". Dealbreaker. Retrieved 12 November 2015.
17. Rushe, Dominic (15 September 2011). "John Mack, aka Mack the Knife, steps down from Morgan Stanley after 30 years". The Guardian. Retrieved 12 November 2015.
18. De La Merced, Michael J. (27 March 2012). "K.K.R. Hires Mack as Senior Adviser". The New York Times. Retrieved 12 November 2015.
19. Benoit, David (27 March 2012). "Deal Journal: John Mack to Join KKR as Senior Adviser". The Wall Street Journal. Retrieved 13 November 2015.
20. "John Mack steps down from Rosneft". Financial times. 29 May 2014. Retrieved 30 October 2016.
21. Moyer, Liz (21 July 2006). "SEC Wants Mack". Forbes. Retrieved 13 November 2015.
22. Morgenson, Gretchen; Bogdanich, Walt (4 August 2007). "Report Says S.E.C. Erred on Pequot". The New York Times. Retrieved 13 November 2015.
23. "Executive Compensation: 2007 Annual Comp.: John J. Mack". Equilar. 2007. Archived from the original on 8 February 2009. Retrieved 13 November 2015.
24. "Executive Compensation: 2008 Annual Comp.: John J. Mack". Equilar. 2008. Archived from the original on 14 April 2009. Retrieved 13 November 2015.
25. Taibbi, Matt (13 February 2014). "Ex-Morgan Stanley Chief Jams Foot in Mouth, Complains of CEO Abuse". Rolling Stone. Retrieved 12 November 2015.
26. Ruhle, Stephanie; Miller, Matt (11 February 2014). "John Mack Says Wall Street Pay Debate Is `Healthy'". Bloomberg Television. Retrieved 12 November 2015.
27. Raghavan, Anita (14 May 2008). "Citi's Bad Bet". Forbes. Retrieved 13 November 2015.
28. Craig, Susanne; McCracken, Jeffrey; Luccetti, Aaron; Kelly, Kate (29 December 2008). "The Weekend That Wall Street Died". The Wall Street Journal. Retrieved 12 November 2015.
29. "John Mack on Saving Morgan Stanley, Inside the Bunker" (Flash Video (26:22)). Wharton School of the University of Pennsylvania. October 14, 2009. Retrieved May 19, 2010.
30. Matheson, Sarah (7 October 2013). "NewYork-Presbyterian Hospital Breaks Ground for New Emergency Department". Epoch Times. Retrieved 13 November 2015.
31. Philbin, Brett (9 November 2011). "Deal Journal: John Mack Is Finding His Next Act". The Wall Street Journal. Retrieved 13 November 2015.
32. Campbell, Dakin (12 April 2012). "Ex-Morgan Stanley CEO John Mack Joins LendingClub Board". Business Week. Archived from the original on 13 April 2012. Retrieved 13 November 2015.
33. Stroup, Katherine (26 February 1999). "Couple contributes $10-million donation to Campaign for Duke". The Chronicle. Retrieved 12 November 2015.
34. Duke Medicine News and Communications (30 January 2004). "C.J. Mack Foundation Gives $10 Million to Duke Center for Integrative Medicine". Duke Medicine. Retrieved 12 November 2015.
35. Jones, David (19 March 2007). "Mack, wife donate $5M to Shaw University". Crains New York Business. Retrieved 13 November 2015.
36. Saigol, Lina (12 June 2013). "'Mack the Knife' brings fearsome reputation to new role". Financial Times. Retrieved 12 November 2015.
37. "Inside the Bunker: CEO John Mack on Saving Morgan Stanley". University of Pennsylvania. 14 October 2009. Retrieved 13 November 2015.
38. "Board of Visitors: Christy King Mack, P'99, '01". Duke biatchUniversity. Retrieved 12 November 2015.

Further reading

• United States. Congress. Senate. Committee on the Judiciary, and United States. Congress. Senate. Committee on Finance. "The Firing of an SEC Attorney and the Investigation of Pequot Capital Management." Washington: U.S. G.P.O., August 2007. ISBN 978-0-160-79426-1 OCLC 681427896
• Beard, Patricia. Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley. New York: Harper Perennial, 2008. ISBN 978-0-060-88192-4 OCLC 712591278
• Mack, John J. "Testimony of John J. Mack Chairman and Chief Executive Officer, Morgan Stanley before the United States House of Representatives Committee on Financial Services." February 11, 2009.