Bankers’ reputations may be at an all-time low, but top financial officials are turning out in force at this year’s World Economic Forum meeting in Davos, Switzerland, calculating that the business opportunities to rub shoulders with industry CEOs, regulators and world leaders outweigh any public-relations flak for attending an elite jamboree in a Swiss ski resort.
Last year, at the height of the crisis, many prominent bankers decided against making the trek. But next week, most of the biggest banks will be represented. Two no-shows from last year, Robert E. Diamond, president of Barclays PLC, and Vikram Pandit, chief executive of Citigroup Inc., will both be there. Goldman Sachs Group Inc. is sending five top executives, led by Chief Operating Officer Gary Cohn.
Bank of America Corp. sent none of its top executives last year. This year, new CEO Brian Moynihan, who has made statements expressing remorse for the financial crisis since his elevation in December, will use the opportunity to make his first overseas trip in the post and will attach trips to other European cities to meet clients, regulators and bank employees. Morgan Stanley Chairman John Mack and Josef Ackermann, chairman of Deutsche Bank AG, will attend. One prominent no-show: JP Morgan Chase & Co. Chief Executive James Dimon.
By one measure, the timing could hardly be worse, coming as banks and securities firms announce 2009 bonuses. Total executive compensation for the year is expected to be nearly $150 billion for U.S. institutions alone, based on securities filings. Public wrath is running as high as ever, with everyone from President Barack Obama to tabloid editors taking aim at bank executives. Worse still, Davos and the bonus season come amid blanket coverage of the catastrophe in Haiti. “It’s a double-edged sword,” says Leslie Gaines-Ross, chief reputation strategist for PR firm Weber Shandwick. “Davos represents a serious forum and they should be part of it. But to Main Street, it’s the Alps versus Haiti right now.”
Reconstruction of the Haitian economy will be at the forefront of discussions, with an emphasis on galvanizing international businesses to invest in an economy they largely shunned even during the boom. Former U.S. President Bill Clinton, a U.N. special envoy for Haiti, will address a session Thursday.
The banks stress that Davos is a sterling opportunity for their executives to meet with clients, regulators and politicians. About 30 presidents and prime ministers are expected to attend, as well as a slate of central bankers and scores of industry executives. No-shows risk seeing rival bankers cozy up to their best contacts.
Moreover, with regulators and politicians currently considering a host of new banking regulations, Davos affords a unique opportunity for informal lobbying. BofA says Mr. Moynihan, its new CEO, expects to meet with European banking regulators.
At the same time, the panels offer executives a chance to get their message out to the roughly 500 journalists from around the world in attendance. “If the story line at the moment is executive compensation, this is the chance to get out and say ‘This is our rationale,'” says Richard Edelman, president of PR firm Edelman. “You have to get out there and sell your story.”
PR experts advise the bankers to tread carefully, to avoid glitzy photos ending up in the press. Bank officials say client dinners will be deliberately low-key this year. Some executives also are participating in the social forums organized at Davos.
“They don’t want be seen skiing or with a drink in their hand,” says Ms. Gaines-Ross. “They should fly commercial. … They need to make sure this is all business.”
Barclays’ bankers are flying commercial, a company representative says. Mr. Pandit will take Citigroup’s corporate jet because he has to fly to a number of other international meetings, says a company spokeswoman. BofA said its executives will use a corporate jet because they are making a number of stops in Europe, including London. Representatives at Goldman and J.P. Morgan declined to comment on their executives’ mode of travel.
Organizers take pains to depict Davos as a serious opportunity to discuss the world’s most vexing problems.
“Stereotyping Davos as this playground is erroneous,” says Mr. Edelman. “People are working 18 hours a day. You come back exhausted.”