Not long ago Ron O'Hanley was named the next Chief Executive of State Street, the world's second largest trust bank. He has been joined by Cyrus Taraporevala, the new President and Chief Executive of State Street Global Advisors, the investment management arm of State Street Corporation and a global leader with $2.7 trillion in assets under management. While the company marches on, he has challenges of his own, but with a long term thinker as Mr O'Hanley, SSGA is pushing in into higher margin products.
State Street Global Advisors provides disciplined investment solutions spanning both indexing and active strategies to many of the world's largest, most sophisticated investors. Cyrus is also a member of State Street Corporation’s Management Committee, the company’s most senior strategy and policy-making team.
Prior to this role, Cyrus was Head of the Global Institutional Group at State Street Global Advisors, responsible for leading the global client-facing, product and marketing teams delivering SSGA's capabilities to institutional investors around the world.
51 year old Cyrus has more than 27 years of experience in asset management. Prior to joining SSGA in 2016, Cyrus led Fidelity Investments' Retail Managed Accounts and Life Insurance & Annuities businesses. Cyrus joined Fidelity from BNY Mellon Asset Management, where he was Head of North American Distribution. Previously, Cyrus helped to oversee Legg Mason's institutional business, directed business strategy for Citigroup Global Investment Management, and was a partner in the Financial Institutions practice of McKinsey & Company, based in New York and Copenhagen in the course of his 14 years at the management consulting firm.
Cyrus received his Bachelor's degree from Sydenham College, University of Bombay and his MBA from Cornell University's Johnson Graduate School of Management. He serves as a board member of The Trustees of Reservations, a Massachusetts-based non-profit conservation organisation.
Mr O'Hanley and Mr Taraporevala both in an article in the the Financial Times said that they are generally pleased at the direction of financial regulatory reform under Donald Trump Administration. If all goes well, with technology upgrades and other improvements, State Street's return on equity could be an industry-leading 15 percent by 2020 from 10.6 last year.
On the other hand, in a new age of equality, the SSGA is getting tough on executive pay, and it promises to signal its displeasure over lavish packages by refusing to back them. Rakhi Kumar, head of Corporate Governance at SSGA, said that last year the group voted against nearly 600 of 5200 pay proposals. It had concerns over 300 more, which it classed as "qualified support." The FT wrote that in this year's shareholder meetings SSGA will make clear its unease by abstaining.
Rakhi Kumar is Managing Director and Head of ESG Investments and Asset Stewardship at State Street Global Advisors (SSGA).
As Head of ESG Investments, Rakhi leads SSGA's efforts to strengthen integration of ESG into the investment process. She is responsible for developing the firm's ESG investment philosophy and global business strategy. As Head of Asset Stewardship, she oversees all of SSGA's proxy voting and engagement activities and is responsible for developing SSGA's thought leadership and voting guidelines in this area.
Rakhi is also the Chair of SSGA's ESG Investment Working Group and is a member of SSGA's Senior Leadership Team, Global Proxy Review Committee, International Class Actions Committee, and State Street's Corporate Responsibility Working Group. She is also a member of the Council of Institutional Investors' Corporate Governance Advisory Council and a member of the Principles of Responsible Investors' (PRI's) Bondholder Engagement Working Group.
In 2017, Rakhi was honored with the Abigail Adams Award by the Massachusetts Women's Political Caucus and was named on the Ten to Watch list of innovators and influencers in 2018 by wealthmanagement.com and on the Power50: Newsmakers list by the Boston Business Journal for her efforts to enhance gender diversity on company boards. She was also named to the 2017 and 2016 NACD Directorship 100, the annual list of the most influential people in the boardroom and on corporate governance. In 2015, she was a recipient of the North America Industry Leadership Award by the 100 Women in Hedge Funds group for her work in the field of corporate governance. Prior to that, Rakhi was named as one of the ten most influential people in corporate governance in 2014 by the Global Proxy Watch magazine.
Rakhi earned her MBA ('02) from Yale University and her Bachelors of Commerce ('95) from Bombay University. She has been a member of the Institute of Chartered Accountants of India since 1997.
Ms Kumar said SSGA's abstention drive would begin with votes on pay but could cover other management proposals. She said talks had started with big companies about how they should interpret such vote. It is also supported by Cyrus and he thinks this kind of engagement should be routine for companies that effectively manage "permanent capital".
