George M. Salem, the veteran bank stock analyst, is calling it a career after 30 years on Wall Street.
Among the reasons he cited was the personal toll taken by what he called "a younger person's job," but he also spoke strongly about changes in the brokerage industry, notably a weakened "Chinese wall" between investment banking and equity research.
"I look back on it as a string of 120 earnings seasons," said Mr. Salem, 58, speaking Tuesday from his office at Gerard Klauer Mattison & Co., New York. "I began to think there might be more to life."
The transformation of Wall Street - spurred by negotiated stock commissions, huge investment banking advisory fees for mergers, and lately by acquisitions of brokerages by banks - has created a very different environment for analysts, he said.
The changes have undermined the independence of analysts, he said, and degraded the quality of investment research.
"Over the past 30 years, analysts have gotten more and more involved in investment banking, and integrity has been sacrificed," Mr. Salem said. "The investing public is being shortchanged because it is not really research they are getting but something tailored to getting a deal done."
"I've never been afraid to be negative," said Mr. Salem, who has long been known for his outspoken and sometimes bearish sentiments on the industry he covers.
That attitude was on display as recently as last week, when he warned that "investors may be unpleasantly surprised by Citicorp's true exposure in Asia" because the New York banking company "has still not fully disclosed the nature of its assets" in the region.
Advising clients to take profits in the company's stock, which he rates a "hold," the analyst sounded two familiar themes-the need for more balance sheet data from banks and the enduring truth that credit risk is "the basic risk in banking."
Still, Mr. Salem is generally upbeat about the industry he has tracked for three decades. "The banks are in the best shape they've ever been, and their loss of market share in some key areas is being reversed," he said.
Mr. Salem's professional anniversary falls April 9. On that day in 1968, he became a bank analyst at Dean Witter-now part of Morgan Stanley, Dean Witter, Discover & Co.-after five years at the former Chemical Bank.
"I answered an advertisement saying 'junior analyst wanted, MBA required, salary $12,000.' That was top dollar in those days," he recalled.
He subsequently did stints as a bank analyst at Drexel Burnham and Donaldson, Lufkin & Jenrette and two terms at Prudential Securities, covering as many as 24 banks at a time. He has worked since 1995 at Gerard Klauer.
"He was the toughest boss I've ever had," said Ruchi Madan, banking analyst at PaineWebber Inc., who was an assistant to Mr. Salem at Prudential. "He probably taught me more in three years than I otherwise could have learned in 10."
Mr. Salem said he has no immediate plans but is considering a range of options, including teaching.
