Marshall Carter Quits Chase For Key Post at State Street
State Street Boston Corp. has plucked Marshall N. Carter from Chase Manhattan Corp., where he helped build the nation's top global custody business, and put him in line for the chief executive's job.
Bypassing strong internal candidates, State Street's chairman and chief executive, William S. Edgerly, said on Tuesday that Mr. Carter will become president, chief operating officer, and a director of the Boston-based company.
Mr. Carter, 51, fills a post left vacant when Peter S. Madden stepped down in late March.
In Line for Top Jobs
Mr. Edgerly, who is 64 and plans to retire next year, said Mr. Carter is "clearly in line" to succeed him.
Mr. Carter spent 15 years at Chase, and his departure is considered a major loss for the New York bank. Most recently, he served as senior vice president and head of the global securities unit, nurturing the company's global custody business. In this complex and growing business, institutions use sophisticated software to perform accounting and keep records of overseas investments for their clients.
Chase has $110 billion under global custody, compared with $86 billion at State Street. Citicorp, Northern Trust Co. and Banker's Trust Co. are other major forces in the business. Mr. Carter's defection is expected to heat up the race for market leadership.
"It's a blow hen you lose anyone of Marshall's standing," said Robert Tetenbaum, a consultant with the First Manhattan Consulting Group Inc., New York, of Chase's operation.
Thomas G. Labreque, chairman and chief executive of Chase, issued a statement praising Mr. Carter for making Chase the No. 1 global custodian. "Marsh has been a good friend to all of us and he has served Chase so ably in many different capacities," Mr. Labrecque said. Chase will name a successor shortly, a bank spokesman said.
State Street, in $11.7 billion-asset company, has grown rapidly by offering fee-based services, including global custody and master trust.
The company has increasingly pinned its fortunes on global custody as the domestic trust market has matured. Specifically, it has pumped a great deal of money into developing a Horizon computer system for global operations. Mr. Carter's challenge will be to extend this global business.
Member of Group of 30
Mr. Edgerly met Mr. Carter when they were both members of the Group of Thirty, which makes recommendations for revamping world securities clearance and settlement processes. "He emerged as a real leader," Mr. Edgerly said.
Analysts have called the State Street position one of the most desirable jobs in banking because of the company's strong growth record. In recent weeks, the company's stock has crept up to a 12-month high of $51 and was trading Tuesday afternoon at $48.625.
One of the company's few setbacks in recent years was the exit of Mr. Madden, who had been Mr. Edgerly's apparent successor since the 1980s. Mr. Madden firmly denied any management clash, saying he left for personal reasons and would continue in a consulting role.
"The choice of Mr. Carter is a boost after the loss of Madden," said James Moynihan, an analyst for Advest Inc. in Boston. "He has depth of background in global strategy."
Skirting the Inner Circle
Mr. Edgerly had been expected to choose a No. 2 from his inner circle. State Street allows its unit heads to operate with a great deal of independence and has groomed a handful of strong leaders considered capable of filling his shoes. David Spina, chief financial officer, and Edward Allinson, executive vice president in charge of mutual funds services, were frequently cited as qualified candidates.
Mr. Spina sid in an interview that he is looking forward to working with Mr. Carter. "It's a big day for us," he said. "Marshall's appointment will help drive our global expansion."
At Chase, Mr. Carter held a variety of sales and operations positions before taking charge of global securities in 1988. Associates call him genial and down to earth.
He joined Chase in 1976 after a long and distinguished military career. He earned the Navy Cross for heroism while serving as a Captain in the United States Marine Corps in Vietnam. After the war, he won a White House Fellowship and worked at the State Department and the Agency for International Development.