April 17, 2024

The Boss: Jack B. Dunn of FTI Consulting, on Baseball and Beyond

Four days after I was born, my father, then the owner, whisked me off to spring training. When I was growing up, and the Orioles were a major-league team, Brooks Robinson would come to my birthday parties. I got batting lessons from another legendary Oriole, Frank Robinson, and met luminaries like Ralph Houk of the Yankees. It was a fun-filled childhood.

My dad sold the team in 1954 but stayed on in a number of roles. I attended Princeton, as he did, and I graduated in 1973 with a degree in religion. I’d always been fascinated by the subject, but I talked to a few educators I respected, like Redmond Finney, headmaster of the Gilman School, and Milton Eisenhower, a president of Johns Hopkins University, about whether to choose a more practical major. They said your undergraduate major teaches you how to learn, and that’s most important. That solidified my choice.

The summer after my sophomore year, I served as assistant general manager of the Miami Orioles farm team and ran it for a month when the man who had the job had to leave for his own training in different work. He mentored me for a couple of months first.

After graduating, I worked three years in the brokerage business. The day I registered as a broker, in 1973, the Dow closed over 1,000, but it would soon drop several hundred points. I had always planned on getting an advanced degree to build on my finance and investment banking interest, but I chose law school to have more options.

I graduated from the University of Maryland School of Law in 1979 and worked for Weinberg Green of Baltimore for three years. Legg Mason, the financial services firm, was one of our clients. In 1982, I left to become a managing director at Legg Mason and stayed for 10 years.

In 1992, Legg Mason invested in what was then the Forensic Technologies International Corporation. I joined the board, which asked me to find a chief financial officer. I applied for the job and was selected. In 1993, I also bought an interest in the Orioles — and am still a part-owner. In 1995, I was made president and C.E.O. of Forensic Technologies International, and the next year we changed our name to FTI Consulting and went public.

We now have 3,800 employees and offices in 24 countries. We assist with litigation support, economic analysis, technology, strategic communications and corporate restructurings. Recently, the trustee handling the Bernard L. Madoff fraud hired us to help with the planning effort to recover victims’ money.

I’ve learned that the tone set at the top permeates an organization. You can talk about the importance of internal communication, but what most sends a message is the people you pick to lead.

Great C.E.O.’s can be charismatic, and geniuses. But they are lucky if they have those traits. If you pick great leaders and are honest with employees, it can mean the difference between winning and losing. Some leaders’ biggest strength is that they show their humanity. Other leaders’ strength is that they don’t. It’s a matter of personal style.

When he’s not studying, my 20-year-old son, Jack, is a disc jockey. Like me, he loves music, as I did at his age. We’ve both played professionally at parties and dances. Also like me, he’s had a negative cash flow because of it. We’ve both gotten $200 for a job, then spent $400 on musical equipment.

As told to Patricia R. Olsen.

Article source: http://www.nytimes.com/2012/11/04/jobs/jack-b-dunn-of-fti-consulting-on-baseball-and-beyond.html?partner=rss&emc=rss

DealBook: Citigroup Earnings Plummeted in Third Quarter on Write-Down

A Citibank branch in New York.Brendan McDermid/ReutersA Citibank branch in New York.

9:42 a.m. | Updated

Citigroup said on Monday that its third-quarter earnings plummeted because of a $4.7 billion loss related to the joint venture brokerage business Morgan Stanley Smith Barney.

Last month, Citigroup agreed to sell its part of the joint venture, beginning with a 14 percent stake, to Morgan Stanley. Citigroup said at the time that it was writing down the value of its remaining interest in the brokerage business.

The loss was offset slightly by an uptick in mortgage lending and buoyed by a rebound in capital markets. Citigroup, the nation’s third-largest bank, reported net income of $468 million, or 15 cents a share, on revenue of $14 billion, compared with net income of $3.8 billion, or $1.23 a share, in the quarter a year earlier.

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Excluding the loss on its brokerage unit, a one-time accounting charge and credit adjustments, the bank reported earning $3.27 billion, or $1.06 a share, up from $2.57 billion, or 84 cents a share, in the period a year earlier.

Citigroup was expected to record earnings per share of 96 cents on revenue of $18.7 billion.

Like its rivals in the industry, Citigroup is grappling with sluggish growth in the United States.

Under the leadership of Vikram S. Pandit, its chief executive, the bank has worked to sharply reduce the bank’s expenses and credit losses. “Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues,” Mr. Pandit said in a statement.

Citigroup

Along with Bank of America, Citigroup was among the banks most crippled by the financial crisis of 2008. Mr. Pandit has vowed to restore the bank to profitability, in part by shedding more troubled assets.

Citigroup is still trying to work through the glut of bad assets it holds in its Citi Holdings Unit.

Increasingly, a large share of the company’s earnings stem from its consumer banking unit in North America, which includes mortgage lending.

John C. Gerspach, the bank’s chief financial officer, emphasized in a conference call on Monday that Citigroup was able to successfully grow across its “core businesses.”

While Citigroup did not get the same help from mortgages as rivals like JPMorgan Chase and Wells Fargo, which reported robust profits on Friday from a refinancing frenzy, the bank reported an 18 percent increase in profit in its North American banking segment, in part because of mortgage lending. Even though mortgage originations were down, revenue in the unit was up, in part as a result of widening spreads on the loans. Mr. Gerspach suggested the bank could have been more nimble by increasing staffing to handle the burst in refinancing activity.

On Friday, JPMorgan’s chief executive, Jamie Dimon, pointed to robust growth in its mortgage banking unit, sounding an optimistic note on the housing market.

“We believe the housing market has turned the corner,” Mr. Dimon said.

Mr. Gerspach, however, struck a more cautious tone. “There is still a question, clearly in my mind, as to whether we have a strong enough economy to support the housing market,” he said.

The bright spot for Citigroup on Monday was a 67 percent increase in profit from its securities and banking unit, as the bank benefited from revived capital market activity.

“We continue to gain market share in investment banking,” Mr. Gerspach said. He pointed to “improved market share in every investment product.”

Outside of the United States, however, some of Citigroup’s results were lackluster. Profit in its international consumer banking unit fell 3 percent, to $862 million, from $885 million in the period a year earlier. With a large international footprint, the bank has positioned itself to benefit from increased lending in Asia and Mexico.

“There is an underlying growth story in the numbers,” Mr. Gerspach said.

Latin America, where Citigroup has positioned much of its hopes for increased profitability, saw some gains. Revenue in the region grew 7 percent, to $2.4 billion. Some of the profit was crimped by reduced loan spreads in Asia.

Across the bank, consumer banking posted revenue gains of 2 percent, to $10.2 billion, from the period a year earlier, while net income in the consumer banking unit increased 18 percent, to $2.2 billion.

Shares of Citigroup were up nearly 3 percent in early trading in New York on Monday.

Article source: http://dealbook.nytimes.com/2012/10/15/citigroup-earnings-plummet-in-third-quarter/?partner=rss&emc=rss