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| 'We need a call to action': Stacey Cunningham, the NYSE's first female president | 'We need a call to action': Stacey Cunningham, the NYSE's first female president |
| (12 days later) | |
| The Fearless Girl is on the move. The bronze sculpture of a little girl defiantly facing off against Wall Street’s Charging Bull launched a million selfies and became an unlikely avatar of the #MeToo movement. Soon it will be transported a few hundred metres down the road in downtown Manhattan to confront another symbol of entrenched masculinity: the New York Stock Exchange (NYSE). Stacey Cunningham says she couldn’t be more delighted. | The Fearless Girl is on the move. The bronze sculpture of a little girl defiantly facing off against Wall Street’s Charging Bull launched a million selfies and became an unlikely avatar of the #MeToo movement. Soon it will be transported a few hundred metres down the road in downtown Manhattan to confront another symbol of entrenched masculinity: the New York Stock Exchange (NYSE). Stacey Cunningham says she couldn’t be more delighted. |
| “I think she’s fantastic,” says Cunningham, the 67th president of the NYSE and the first woman to head the male-dominated institution in its 226-year history. “For me, she is a message to individuals, though. I think we need to call ourselves to action, especially as women, not to hold ourselves back.” | “I think she’s fantastic,” says Cunningham, the 67th president of the NYSE and the first woman to head the male-dominated institution in its 226-year history. “For me, she is a message to individuals, though. I think we need to call ourselves to action, especially as women, not to hold ourselves back.” |
| Cunningham may be a fan of Fearless Girl, but she is not as happy with the gender-focused attention drawn by her elevation to one of the most high-profile jobs in finance. She gives a small, hard smile when asked about the coverage. | Cunningham may be a fan of Fearless Girl, but she is not as happy with the gender-focused attention drawn by her elevation to one of the most high-profile jobs in finance. She gives a small, hard smile when asked about the coverage. |
| She should not really be surprised. The number of women running businesses, let alone institutions of the stature of the NYSE, is still small. And the number of women running the US’s top 500 companies – many listed on the NYSE – fell this year. | She should not really be surprised. The number of women running businesses, let alone institutions of the stature of the NYSE, is still small. And the number of women running the US’s top 500 companies – many listed on the NYSE – fell this year. |
| The floor of the stock exchange itself is also still a sausage fest. It is less male than it has been in the past, but that is because the number of men has been hacked away by technology, not diversity. The majority of the women on the exchange’s floor seem to be working for the 30-plus media outlets based there. | The floor of the stock exchange itself is also still a sausage fest. It is less male than it has been in the past, but that is because the number of men has been hacked away by technology, not diversity. The majority of the women on the exchange’s floor seem to be working for the 30-plus media outlets based there. |
| Cunningham, 43, has been at the exchange on and off (and mostly on) since the 1990s. She says her surprise at the attention her appointment has brought may be because, in retrospect, she has always been gender-blind. | Cunningham, 43, has been at the exchange on and off (and mostly on) since the 1990s. She says her surprise at the attention her appointment has brought may be because, in retrospect, she has always been gender-blind. |
| “I always liked maths, science and problem-solving, so I gravitated towards engineering,” says Cunningham, who grew up in New Jersey, the fourth child of six, three boys, three girls. (“I’m the well-adjusted middle child,” she says.) She says she is disappointed that more girls don’t go into science and maths, but in her own case it was the obvious choice: “I didn’t think about that at all.” | “I always liked maths, science and problem-solving, so I gravitated towards engineering,” says Cunningham, who grew up in New Jersey, the fourth child of six, three boys, three girls. (“I’m the well-adjusted middle child,” she says.) She says she is disappointed that more girls don’t go into science and maths, but in her own case it was the obvious choice: “I didn’t think about that at all.” |
| When Cunningham was at Lehigh University in Pennsylvania, studying industrial engineering, one of her sisters asked her to report back on the date-worthiness of the boys in her class. “As I looked around the classroom, I realised I was the only girl in the class – and I had been in that class for weeks. I had no idea that I was the only girl in the class, because I just didn’t see it,” she says. “That’s been a consistent theme. Until about four weeks ago [now two months ago, when she was appointed], when it was actually hard to tune out the fact that I’m a woman in this industry.” | When Cunningham was at Lehigh University in Pennsylvania, studying industrial engineering, one of her sisters asked her to report back on the date-worthiness of the boys in her class. “As I looked around the classroom, I realised I was the only girl in the class – and I had been in that class for weeks. I had no idea that I was the only girl in the class, because I just didn’t see it,” she says. “That’s been a consistent theme. Until about four weeks ago [now two months ago, when she was appointed], when it was actually hard to tune out the fact that I’m a woman in this industry.” |
| She must have had to tune out a lot. She first entered the NYSE in 1994 as an intern, when she was one of about 30 women among 1,000 men. “I walked in and right away I fell in love with the place,” she says. The “energy and the pace” reminded her of her family. “What struck me right away was the sense of community.” | She must have had to tune out a lot. She first entered the NYSE in 1994 as an intern, when she was one of about 30 women among 1,000 men. “I walked in and right away I fell in love with the place,” she says. The “energy and the pace” reminded her of her family. “What struck me right away was the sense of community.” |
| After she graduated, she came back to the NYSE, working on the trading floor until 2005, when she took time off to complete a culinary training course. She then worked at a rival stock exchange, the Nasdaq, as director of capital markets, before rejoining the NYSE and becoming the exchange’s chief operating officer in 2015. | After she graduated, she came back to the NYSE, working on the trading floor until 2005, when she took time off to complete a culinary training course. She then worked at a rival stock exchange, the Nasdaq, as director of capital markets, before rejoining the NYSE and becoming the exchange’s chief operating officer in 2015. |
| She acknowledges that things have changed for women at the NYSE in the decades since she first worked here. For one, they have proper bathrooms. When she started, women had to make do with one tiny bathroom converted from a phone booth, while the men’s bathrooms had a palatial lounge area. | She acknowledges that things have changed for women at the NYSE in the decades since she first worked here. For one, they have proper bathrooms. When she started, women had to make do with one tiny bathroom converted from a phone booth, while the men’s bathrooms had a palatial lounge area. |
| But she never experienced the rampant sexism other women in finance have complained about, she says. “When you walked through a trading floor 20 years ago as a woman, there was a little bit of you that could feel the room looking at you,” she says. But she says she never experienced any behaviour that made her uncomfortable. | But she never experienced the rampant sexism other women in finance have complained about, she says. “When you walked through a trading floor 20 years ago as a woman, there was a little bit of you that could feel the room looking at you,” she says. But she says she never experienced any behaviour that made her uncomfortable. |
| Whether or not NYSE is sheltering a marketing operation or a vital financial institution is the least of its problems | Whether or not NYSE is sheltering a marketing operation or a vital financial institution is the least of its problems |
| “In my experience, if I said to somebody: ‘Hey, that’s not OK, too much,’ and I said it with a smile, too, then they knew,” she says, giving that tight little smile again. “Whether it was the language people used, or something else that I didn’t appreciate, I just made it clear where I stood and I felt that I was respected for it. I’m not saying that every woman would have had that same experience. I’m sure there are women who tried to draw lines and they were ignored. I was fortunate that when I drew lines people stayed outside them.” | “In my experience, if I said to somebody: ‘Hey, that’s not OK, too much,’ and I said it with a smile, too, then they knew,” she says, giving that tight little smile again. “Whether it was the language people used, or something else that I didn’t appreciate, I just made it clear where I stood and I felt that I was respected for it. I’m not saying that every woman would have had that same experience. I’m sure there are women who tried to draw lines and they were ignored. I was fortunate that when I drew lines people stayed outside them.” |
| Cunningham takes over the top spot at a challenging moment for the NYSE. Some of that is on view during my visit. I arrive for the opening bell that marks the beginning of the trading day and is a fixture of the financial news cable TV shows. We are corralled into a holding pen in line of the TV cameras as Cunningham rings the bell, alongside executives from BJ’s, a discount warehouse retailer, who are celebrating the launch of its share sale on the NYSE. | Cunningham takes over the top spot at a challenging moment for the NYSE. Some of that is on view during my visit. I arrive for the opening bell that marks the beginning of the trading day and is a fixture of the financial news cable TV shows. We are corralled into a holding pen in line of the TV cameras as Cunningham rings the bell, alongside executives from BJ’s, a discount warehouse retailer, who are celebrating the launch of its share sale on the NYSE. |
| The mood is frenetic, celebratory, somewhere between a graduation and the start of a race. But the energy is inside the corral, generated by the people who work for BJ’s, the exchange or the media organisations that report from the floor. Outside the pen, the number of brokers employed on the NYSE’s vast floor is in the hundreds, not the thousands of years gone by. You leave with the impression things will be pretty quiet once the opening ceremony is over. | The mood is frenetic, celebratory, somewhere between a graduation and the start of a race. But the energy is inside the corral, generated by the people who work for BJ’s, the exchange or the media organisations that report from the floor. Outside the pen, the number of brokers employed on the NYSE’s vast floor is in the hundreds, not the thousands of years gone by. You leave with the impression things will be pretty quiet once the opening ceremony is over. |
| Most stock trading is now done electronically, principally from a far less photogenic datacentre in New Jersey. Its critics claim the exchange is a dog and pony show – Disneyland for capitalism, a marketing exercise where CEOs can ring a bell and a few traders run about looking busy for the cameras while the algorithms do the real work. | Most stock trading is now done electronically, principally from a far less photogenic datacentre in New Jersey. Its critics claim the exchange is a dog and pony show – Disneyland for capitalism, a marketing exercise where CEOs can ring a bell and a few traders run about looking busy for the cameras while the algorithms do the real work. |
| “That floor is a TV station,” says one senior Wall Street executive, who did not want to be named. “There is pomp and circumstance, but it’s nothing but a bunch of clapping seals.” | “That floor is a TV station,” says one senior Wall Street executive, who did not want to be named. “There is pomp and circumstance, but it’s nothing but a bunch of clapping seals.” |
| Cunningham and the NYSE could not disagree more. Algorithms cannot compete with human discernment and experience, or with days of big news. Cunningham mentions the day of the Brexit vote, for example – the human touch helped calm jitters. People bring “judgment”, she says. “One analogy we often use to describe how people add to that equation is an airline pilot. So, a plane can take off and land without a pilot. You don’t need to have a human being in the cockpit. But that human being adds value, especially during the most tumultuous times,” she says. | Cunningham and the NYSE could not disagree more. Algorithms cannot compete with human discernment and experience, or with days of big news. Cunningham mentions the day of the Brexit vote, for example – the human touch helped calm jitters. People bring “judgment”, she says. “One analogy we often use to describe how people add to that equation is an airline pilot. So, a plane can take off and land without a pilot. You don’t need to have a human being in the cockpit. But that human being adds value, especially during the most tumultuous times,” she says. |
| Frankly, however, the argument over whether or not the NYSE’s much photographed neoclassical facade is sheltering a marketing operation or a vital financial institution is the least of its problems. | Frankly, however, the argument over whether or not the NYSE’s much photographed neoclassical facade is sheltering a marketing operation or a vital financial institution is the least of its problems. |
| One issue for all the exchanges, but the NYSE in particular, is that there are fewer and fewer share sales like that of BJ’s. Big companies such as Uber, Airbnb and WeWork are choosing to stay private for longer, powered by huge piles of private equity money. | One issue for all the exchanges, but the NYSE in particular, is that there are fewer and fewer share sales like that of BJ’s. Big companies such as Uber, Airbnb and WeWork are choosing to stay private for longer, powered by huge piles of private equity money. |
| Rival exchanges are also chipping away at the NYSE and other establishment players. The NYSE accounts for about 22% of stocks traded in the US, but that is down from about one-third of trading in 2009. It now competes with dozens of less high-profile trading platforms, such as the “dark pools” (exchanges run in-house by big banks such as Goldman Sachs that account for 40% of trading); Nasdaq, its closest competitor, where tech companies including Apple and Facebook are listed; the Chicago Board Options Exchange; and IEX, the exchange set up by Brad Katsuyama, a central character in Michael Lewis’s book Flash Boys, about high-speed traders. | Rival exchanges are also chipping away at the NYSE and other establishment players. The NYSE accounts for about 22% of stocks traded in the US, but that is down from about one-third of trading in 2009. It now competes with dozens of less high-profile trading platforms, such as the “dark pools” (exchanges run in-house by big banks such as Goldman Sachs that account for 40% of trading); Nasdaq, its closest competitor, where tech companies including Apple and Facebook are listed; the Chicago Board Options Exchange; and IEX, the exchange set up by Brad Katsuyama, a central character in Michael Lewis’s book Flash Boys, about high-speed traders. |
| The competition – and some investors – are pressing the NYSE and the Nasdaq on their fees, while the Securities and Exchange Commission (SEC), the US’s main financial watchdog, has a pilot scheme under review that aims to assess how, and if, the complex system of fees and rebates the NYSE and others pay to brokers for trading on their exchange affects trading. | The competition – and some investors – are pressing the NYSE and the Nasdaq on their fees, while the Securities and Exchange Commission (SEC), the US’s main financial watchdog, has a pilot scheme under review that aims to assess how, and if, the complex system of fees and rebates the NYSE and others pay to brokers for trading on their exchange affects trading. |
| Critics argue that the rebates on broking fees offered by the NYSE and others to encourage traders to use their market create a conflict of interest. They incentivise brokers to send their customer orders to exchanges that pay the biggest ones, even if their clients might be better served elsewhere. | Critics argue that the rebates on broking fees offered by the NYSE and others to encourage traders to use their market create a conflict of interest. They incentivise brokers to send their customer orders to exchanges that pay the biggest ones, even if their clients might be better served elsewhere. |
| The two-year pilot, which has the support of some huge pension funds, would allow the SEC to assess their impact on how trades are made. But Cunningham says the scheme is poorly designed – it does not include the dark pools, for example – and the Nasdaq has hinted that it may sue to stop the scheme. | The two-year pilot, which has the support of some huge pension funds, would allow the SEC to assess their impact on how trades are made. But Cunningham says the scheme is poorly designed – it does not include the dark pools, for example – and the Nasdaq has hinted that it may sue to stop the scheme. |
| It is a complicated issue, but one that will require Cunningham to spend more of her time in Washington. | It is a complicated issue, but one that will require Cunningham to spend more of her time in Washington. |
| “The biggest worry for her is that the regulatory tailwinds are going the other way,” said Ronan Ryan, the president of IEX. Ryan, who runs a rival exchange that has been involved in a public spat with the NYSE over the fees study, says the NYSE is too dependent on the fees it charges for data and is on the wrong side over rebates. | “The biggest worry for her is that the regulatory tailwinds are going the other way,” said Ronan Ryan, the president of IEX. Ryan, who runs a rival exchange that has been involved in a public spat with the NYSE over the fees study, says the NYSE is too dependent on the fees it charges for data and is on the wrong side over rebates. |
| “When you have all of your constituents annoyed about how you are extracting money from the street, it’s unsustainable,” he says. “Look, in 2002, Blockbuster was a video rental store, but something like 70% of their profits came from charging late fees. That was obviously not a sustainable model. I think there’s a correlation to this.” | “When you have all of your constituents annoyed about how you are extracting money from the street, it’s unsustainable,” he says. “Look, in 2002, Blockbuster was a video rental store, but something like 70% of their profits came from charging late fees. That was obviously not a sustainable model. I think there’s a correlation to this.” |
| There is no air of crisis at the NYSE, which has dismissed IEX as an exchange with a “clearly failing” business model. | There is no air of crisis at the NYSE, which has dismissed IEX as an exchange with a “clearly failing” business model. |
| And Cunningham does not believe the NYSE is in trouble. The financial world may be changing – and fast – but the NYSE remains the world’s most famous stock market. She is confident it can adapt and keep its pre-eminent position. | And Cunningham does not believe the NYSE is in trouble. The financial world may be changing – and fast – but the NYSE remains the world’s most famous stock market. She is confident it can adapt and keep its pre-eminent position. |
| “The future of equity markets is increasingly global, technology-focused and data-driven,” she said. In that world, she believes the NYSE “is uniquely positioned” to leverage its huge footprint, and technology, to stay ahead of the pack. | “The future of equity markets is increasingly global, technology-focused and data-driven,” she said. In that world, she believes the NYSE “is uniquely positioned” to leverage its huge footprint, and technology, to stay ahead of the pack. |
| On a brief tour of the recently refurbished NYSE – it looks like a particularly nice outpost of the luxury hotel chain W Hotel – we pop into a room full of portraits of past presidents – all pale males. One day, Cunningham will be up there, too. It is quite a first, even if she does not seem keen to acknowledge it. Perhaps Fearless Girl will ensure she is not the last. | On a brief tour of the recently refurbished NYSE – it looks like a particularly nice outpost of the luxury hotel chain W Hotel – we pop into a room full of portraits of past presidents – all pale males. One day, Cunningham will be up there, too. It is quite a first, even if she does not seem keen to acknowledge it. Perhaps Fearless Girl will ensure she is not the last. |
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