Timothy M. George, a member of the management committee at Greenhill & Co. who has advised on some of the firm’s biggest deals, is leaving as departures from the bank accelerate, said two people familiar with the matter. The stock fell the most since January.
George, who’s based at Greenhill’s New York headquarters and joined the firm one year after its founding, is taking a job with Hamilton, Bermuda-based Lazard Ltd. (LAZ), the largest independent merger adviser, said the people, who declined to be identified because the move hasn’t been made public.
The bank, founded by Robert Greenhill, 75, has lost at least three managing directors since early June after averaging fewer than one such departure annually since its founding in 1996. Simon Borrows, chairman of Greenhill & Co. International LLP and founder of the firm’s European operations, is leaving to join 3i Group Plc, the London-based private-equity firm said July 6. Credit Suisse Group AG (CSGN), the world’s third-largest merger adviser, hired Greenhill’s Alejandro Przygoda in June as global co-head of financial institutions investment banking.
George was part of the Greenhill team advising Hunenberg, Switzerland-based Alcon Inc. on its sale to Novartis AG, a deal first proposed in 2008 and completed this year at a cost of about $50 billion. He also counseled Wendy’s International Inc. on its sale to Nelson Peltz’s Triarc Cos. in 2008 and Ihop Corp. on its acquisition of Applebee’s International Inc. in 2007, according to Corporate Control Alert, an industry newsletter.
Greenhill dropped $4.74, or 9 percent, to $48.22 at 1:23 p.m. in New York Stock Exchange composite trading for the second-biggest decline in the 982-company Russell 1000 Index. The stock has fallen 41 percent this year.
The bank posted a $1.58 million first-quarter loss, the firm’s first in 2 1/2 years. Personnel expenses in the period surged to 75 percent of revenue after Chief Executive Officer Scott Bok, 52, boosted the ranks of managing directors 63 percent since 2007.
Monica Orbe, a spokeswomen for Lazard, declined to comment. George didn’t respond to a message on his Greenhill voicemail.
Only a “handful” of managing directors have left in the past few years, according to a Greenhill statement last month, in which it also disclosed its average annual departures.
“Over the course of our history, we have had a few retirements, sometimes we ask people to leave, sometimes separation is a mutual decision, and least common are cases where we simply lose a valuable asset to a competitor,” Bok said in an e-mailed statement following George’s exit. “It is extremely rare when the departure of an MD from our firm has any meaningful impact on our business.”
It isn’t appropriate to categorize or comment on every person who leaves, he said.
Greenhill has six associates in the New York office, compared with 26 managing directors, a more senior position, listed on its website, excluding George. About half of the firm’s New York-based associates have left in the past year, according to a person familiar with the moves.
Small and mid-sized investment banks such as Lazard and Moelis & Co. typically have three to five associates, analysts and other junior-level employees for each managing director, according to people familiar with staffing levels at such firms.
Greenhill has 20 vice presidents worldwide, three fewer than at the end of last year and nine fewer than at the end of 2009, according to its annual reports.
Following Przygoda to Credit Suisse are George Matsuzaka, a principal at Greenhill, and Carlos Marque, a vice president, said a person with knowledge of the matter. Both of them joined Greenhill from UBS AG (UBSN) along with Przygoda in 2009.
“Our employee headcount is down by a single-digit percentage in the year to date, which is consistent with our stated objective of regaining the market-leading profit margins we achieved for six of our seven years as a public company,” Bok said in the statement.
Robert Greenhill founded the firm after a Wall Street career spanning more than three decades. He joined Morgan Stanley in 1962 and rose to become its president. In 1993, he left to be CEO of Smith Barney Inc.
Greenhill’s offices on New York’s Park Avenue occupy five floors. The firm has about 70 managing directors stationed around the globe. Locations include London, Sydney, Tokyo and Frankfurt, according to its website.
Talent was “very expensive” in 2006 and 2007 before the credit crisis, Bok said at an investor conference in February. Greenhill’s hiring surged in 2008 through 2010 as talent on Wall Street became cheaper and people were more willing to switch firms, he said.
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