CSFB: No Replacement for Jeffrey Peek

July 23, 2003 (PLANSPONSOR.com) - A year and a half after he was named by Chief Executive John Mack to join Credit Suisse First Boston (CSFB), Jeffrey Peek is gone - and he won't be replaced

Peek, 56, originally left Merrill Lynch & Co. less than two years ago to seek a role running a financial services company after he was passed over for the presidency of Merrill. But his position as vice chairman at Credit Suisse Group AG’s (CSR) CSFB unit ended up being a only a short term engagement, and he told Dow Jones that he’s headed for commercial and consumer finance firm CIT Group Inc. (CIT). Peek is to take the new job in September as CIT’s president and chief operating officer, with a plan to eventually take over as CEO.

In a memo to CSFB staff, Mack said Peek won’t be replaced. Instead, the executives underneath Peek will either report directly to Mack or to other unit heads.

Peek, who was in charge of CSFB’s financial services division, which included its private client services group and Credit Suisse Asset Management unit, is the latest in a series of executives associated with asset management to leave the firm. In May, Larry Smith, global chief investment officer left. In June, Henry Wegmann, the head of CSAM’s European division left. Both men departed just months after Peek’s new hire for CSAM global CEO, Michael Kenneally, began restructuring the management reporting lines to add new executives in charge of fixed income, equity and alternative investments.

So far, CSFB’s former bond head Jack DiMaio has been named to run CSAM’s alternative investments line, while a fixed income head is expected in the next month. An equities head will be named later in the year, Dow Jones reported.

Pershing Unit Sale

Peek’s own position within CSFB had changed in the past year, too. The firm sold its Pershing clearing unit to Bank Of New York Co. in January, and Peek’s discussions with CIT began soon after. The unit was one of the largest under Peek’s financial services division when he joined the firm, and its sale diminished the scope of his division, leaving him in charge of just two businesses, private client services and asset management. Three months after the sale, the division’s chief strategist and chief financial officer, former brokerage analyst Amy Butte, also departed.

According to Dow Jones, Peek began meeting with CIT Chairman and CEO Albert Gamper Jr. six months ago, just after the Pershing sale. As their talks continued, Peek asked to meet with board members at CIT, which has headquarters in New York and Livingston, New Jersey. Gamper said he and the board were impressed with Peek’s experience and understanding of capital markets, and he decided he felt comfortable passing the leadership of CIT to Peek. Gamper’s contract with CIT expires at the end of 2004, and he said he expects to step aside and hand control to Peek before then.”Every time I met him I felt more and more comfortable about his management style and ability,” said Gamper of the six-month courtship, according to Dow Jones.

Peek said he wanted to run a company, and acknowledged that CSFB’s Mack isn’t thinking about retirement any time soon. My goal was to run a company and to be able to lead an organization,” said Peek, who said Mack was supportive of his decision. “This became a real dynamic opportunity …I found it very compelling.”