HONG KONG • The culture clash between CLSA Ltd’s old guard and its Chinese owner may have reached a tipping point.
At least four of the Hong Kong brokerage’s most senior managers are following CEO Jonathan Slone (picture) out the door amid mounting tension with CITIC Securities Co Ltd, which bought CLSA in 2013, people with knowledge of the matter said.
COO Nigel Beattie, who was in discussions to take over as CEO in the wake of Slone’s recent resignation, quit this month after failing to reach an agreement on how to run the company, the people said, asking not to be identified because the matter is private.
Xen Gladstone, who ran sales and trading; Edmund Bradley, head of research; and Meade Thomson, head of Japan, also resigned, one of the people said.
The latest departures, which include three members of CLSA’s executive committee, highlight long-simmering concerns among some employees that the firm is losing its culture and independence as CITIC, China’s biggest state-owned brokerage, tightens its grip on the business and overhauls the way staff are compensated.
CITIC’s takeover was viewed by some in the industry as a test case for whether a Chinese brokerage could successfully expand overseas and compete with the likes of Goldman Sachs Group Inc and Morgan Stanley.
While CITIC said it’s committed to growing internationally, the combined company has yet to come anywhere close to matching the global reach of Wall Street’s giants.
Some analysts said the departure of highly paid executives such as Slone will help CLSA cut costs and boost profitability.
But questions remain over whether the loss of seasoned international leaders will hurt the firm’s ability to grow its business outside China.
CITIC shares fell 2.1% at 1:17pm in Hong Kong yesterday, heading for a fourth day of losses. — Bloomberg