For the fifth time in as many years, American Banker reporters and editors are singling out a few executives worthy of the distinction "Leaders of the Bank Card Business." Paradoxically for a period of consolidation that has propelled a handful of top performers ahead of the rest of the pack, there seems an endless supply of "leaders" candidates, and the selections often must come down to subjective judgments.
Including the nine profiles in these pages, 48 articles have been published on bank card leaders at 39 organizations. The two numbers differ because companies like NationsBank, Wachovia, Banc One, and its recent acquisition First USA have each been spotlighted more than once.
But looking back to the 10 in the first edition in 1993 (top left among the four pictured), at least half have since moved on to other jobs. Of the nine profiled just a year ago (cover at lower right), two retired and two others' corporate circumstances materially changed (one gained more direct responsibility over his business unit, one backed away).
All this reflects the realities of an industry in constant flux, the widening gulf between the best and worst performers, and the executives' growing burden of accountability.
"This is the most profitable niche of banking, and probably the most visible," said executive search consultant Kathryn Trott. "High stakes and competition turn it into a pressure-cooker. The pressure-cooker is also a fishbowl."
Consider these repeat stars and the industry forces they represent:
MBNA Corp. is in for the third time. Articles in 1993 and 1996 focused on MBNA America Bank chairman Charles Cawley. For variety's sake, two vice chairmen do the honors this year for what has become the card industry's paragon of stability. The company's low management and employee turnover is a point of pride and could have a lot to do with a growth and profitability record second to none. (Page 4A)
Banc One Corp. returns after a three-year absence, this time with a new face: Richard Vague, from First USA Inc. But Banc One also epitomizes consolidation. Counting two acquisitions - the monoline First USA and the former Premier Bank in Louisiana - Banc One has actually been represented in all five editions. (Page 6A)
Ronald Zebeck is back, with a new affiliation. In 1993, he was basking in the success of the General Motors MasterCard. He engineered its launch for the auto company. Now he is making a different kind of splash for the Fingerhut Corp. spinoff Metris. (Page 12A)
Ms. Trott, a partner of San Francisco-based Allard Associates, said the card industry "has all the normal tensions placed on high performers under a microscope, combined with its own set of competition-driven and technology-driven pressures.
"It's a jungle for the unsuccessful and a bonanza for top talent whose leading-edge companies set the tone and direction for the future," she added.
"This is a challenged business with more potholes than solid ground," said Jerry D. Craft, who was in American Banker's Class of 1993 for his accomplishments at Wachovia Bank Card Services.
He has since changed jobs twice, offering as a consultant to help banks avoid the potholes. Now president and chief executive officer of Program Management Corp. in Atlanta, Mr. Craft said the recent erosion of credit card profits, for competitive and credit-quality reasons, understandably turns up the heat on the managers.
Unlike the monoline companies that specialize in cards and credit lines, "financial institutions may be worried about more cosmic issues and will focus in on things that aren't working, and heads can roll," Mr. Craft said.
K. Shelly Porges, a one-time Bank of America executive and principal in Porges/Hudson Marketing, San Francisco, said the "inherent churn" tends to rise at the top of this industry.
"If you take a wider cross-section than just the leaders, however they may be defined, the volatility may be a bit less," Ms. Porges said. "The high-profile folks seek out and are sought out. If they perform well they get attention and are rewarded well," but they also risk falling on their faces.
Ms. Trott pointed out that the "easy money, cash cow" era is over. The stakes are much higher than in the days when credit card divisions were quiet backwaters, and there is little margin for error: "Report a bad quarter and concede some bad credit decisions, as Advanta did some months ago, and the stock value drops 30%."
To be sure, bank card executives often move on for other than sacrificial reasons. Mr. Craft cited a couple: the sale of their portfolio or their company, or normal retirement.
The intensity may also produce a "burnout factor," Ms. Porges said.
But "the universal language of the CEO is earnings per share," Mr. Craft said. "And there needs to be sustainable long-term growth. The simple fact is credit cards are not earning as much as they have in the past."
Ms. Trott said CEO-level talent - with the requisite "multiplex" of financial and operational skills and strategic and technological vision - is relatively scarce, bidding up its value.
"Technology drives the industry, and when the right tools answer the right questions and target the right customers, truly dramatic things can happen," Ms. Trott said. "The opposite is equally true: uncorrected mistakes that get out of hand can devastate a company, a program, or a CEO."