In 1996, Frank Newman took over Bankers Trust--and a difficult turnaround. He had to restore BT's reputation after a derivatives scandal, reduce its risk profile, and try to produce the high returns that marked the bank in its go-go days. On June 30, less than a month after completing the sale of BT to Deutsche Bank, Newman stepped down--much of his mission still unaccomplished.
Newman did boost BT's investment banking, buying Alex. Brown. But BT's exposure in emerging markets led to a $488 million loss in last year's third quarter, after which BT agreed to sell out to Deutsche for $9 billion. "Newman came into a situation where he would have had to work miracles," says banking consultant Bert Ely. "Inevitably, BT would have been acquired by somebody."
Newman's position at Deutsche weakened after BT admitted using unclaimed funds to fatten profits. The transfers predated Newman, but Deutsche seemed troubled by BT's guilty plea. Don't cry for Newman, 57. The former Deputy Treasury Secretary leaves with a pay package of at least $69 million.