Life at Up Up and Away Investment Management International: Chapter 2: (A Serialized Novel By Robert K. Stephen)


It all started out not too badly at my first largecorp

My first legal job was in the mid eigthies with an up-and-coming insurance company in downtown Toronto by the name of Canadian Reassurance Assistance Providers Ltd. or as many referred to it simply as CRAP.

CRAP was initially a regional insurance company in Southwestern Ontario but a series of very innovative advertisements touting its easy accessibility seemed to grab the attention of the retail customers it sold insurance to. It was a revolutionary approach in the 1980’s where insurance companies were big, fat, rich, customer unfriendly and arrogant.

CRAP was held by a holding company, Bleedco Ltd., that controlled its various companies like a stack of cards. Bleedco was what one might call (by today’s standards) an unethical company as some investment managers categorize companies to invest in as aside from holding CRAP it owned companies in the armament, tobacco, South African goldmining, coal, Las Vegas casino and alcohol sectors.

I distinctly remember a colleague of mine at CRAP was making small talk in the CRAP Toronto office elevator to a senior management type visitor from Bleedco. The man from Bleedco reeked of alcohol and somehow let it slip, “We are going to clean you up and sell you off.” Prophetic words for a young buck like me! Why he blurted that indiscrete comment still puzzled me but I took it as a valid and potentially dangerous statement.

I worked in the institutional division of CRAP but there was also the retail division that sold insurance to the public. The retail division was pulling in an increasingly burgeoning profit while the institutional division was its poor cousin.

The institutional division had a half dead Montreal office, a thriving Toronto Bay Street office, a once powerful and now notional head office location in Waterloo, a decent Calgary office and a struggling Vancouver office. The retail division was present in every province of Canada and had many bricks and mortar locations.

So here I was at CRAP newly recruited and knowing virtually nothing about our institutional main lines of businesses being that of selling insurance policies of diverse types  to mid size businesses and even better to largecorps. We also sold annuity policies and recordkeeping services to employers sponsoring pension funds and other types of employee benefit funds. Most importantly we also provided segregated funds as investment options to defined contribution and defined benefit pension plans. These segregated funds were managed by professional investment managers CRAP retained.

My notional boss was Mr. Thomas Bang who was a lawyer but had made the jump to management as an executive vice president. He loved nothing more than to roam the floor asking where that miserable wretch of the day was. All in good humour that took a bit of time to get used to. He was a quirky but almost a likeable man. Unlike his Senior Management Team (SMT) colleagues, he was not afraid to take the elevator down from the CRAP executive floor and occasionally mingle “with the troops”.

Bang inhabited the executive suites on the top floor of the building. This was the home of SMT for both the retail and institutional divisions of CRAP. A sacred sanctuary with each office having its own bathroom and shower not to mention a splendid high-tech boardroom, well stocked refrigerators and liquor cabinets.

The cadres of the institutional division of CRAP were all in cubicles except for the Assistant Vice President of CRAP’s institutional division Frank Flansky who rarely showed his face as he spent all day crunching numbers cloistered in his office. He was obviously very awkward dealing with people and left that to my real boss Tommy Afar who was chief manager of the CRAP institutional division. Flansky recently arrived from Poland and his English was exceedingly difficult to understand. What he lacked in English and social skills he certainly made up for in mathematical abilities.

My job was to provide solutions on how CRAP institutional could do its business in accordance with the law. Afar was initially very frustrated with me as I simply gave options without making recommendations which was the preferred solution. He had a valid point! It was time for me to move from theory to reality.

I was a new legal resource to the business unit for the institutional division. Although I was called “Legal Counsel” I was working with and as part of the business unit. The business unit had vehemently complained of the arrogance of CRAP’s Legal Department and its incapacity to provide coherent and timely legal advice to the point that the SMT caved in and brought me into the business unit.

Apparently, John Beluga, CRAP’s General Counsel, was furious about having someone with the title of “Legal Counsel” operating outside his Legal Department however I had the impression those in the executive suites took him as a bit of a buffoon and used him to get approval to do business in a questionable fashion. He started his day in the gym and popped in the office at 10. a.m. went for long lunches and left promptly at 5. He struck me as, intellectually weak, easily manipulated and totally out of his league.

On important legal matters I was to deal with Sally Self in the Legal Department. With the backing of the SMT and according to Beluga’s demands there was no power struggle I had to fight. I lost right off the bat. Sally Self was my informal superior on all legal matters deemed significant by Self. This was rather hurtful to me as I had more than five year’s experience than the newly minted Self. In retrospect I should have walked out the door.

Working in the business unit, I gained valuable experience about how to get the job done within acceptable legal parameters. I was the go-to guy. Approachable, friendly and useful so unlike the service they were previously obtaining from the Legal Department. In the right circumstances with the right people CRAP life was not bad. I worked hard and enjoyed myself for close to a decade.

But after a few years I began to see what CRAP enjoyed doing to its employees For example there were the countless non-monetary incentive programs invented by CRAP’s Human Resources Department.

I recall one of them was the Service Award Games where gold, silver and bronze medals were handed out based on set criteria and medals were hung on the necks of the winning team. Another one was the weekly Client Delight Letter ceremony where we all gathered to hear a letter written by a client praising some aspect of our service. Of course, no monetary awards just subtle pressure to show how wonderful you were. What were those clowns in the Human Resources Department thinking of?

Although these campaigns were initially comical to the novice, they became annoying then obviously oppressive particularly with one campaign where employees were required to wear Mickey Mouse ears. Whatever for I am not quite sure. Being a lawyer, I was fortunate enough to be on the edge of most of this palaver and largely unaffected by it. Morale boosting it was thought to be but morally degrading was more like it.

After 5 years as Legal Counsel I received a promotion to Manager of Compliance for the institutional division. However, in addition to this new onerous position I continued to provide legal services to the business unit. Another largecorp lesson which is to load up as many responsibilities on an employee as possible at minimal cost. I had no one to delegate to and all this new responsibility for an extra $2,000 a year.

Speaking of money, a competitor offered me a position for $10,000 more than I was currently earning. I had the job offer and just had to sign the offer but upon reading the offer there was a probationary period. This for someone with close to 7 years of experience! I wanted this clause removed in their offer but their wonderful Human Resources Department insisted upon keeping the probationary clause in so we parted our ways.

CRAP’s Human Resources Department was also whittling down a once generous stock purchase plan where initially there were matching contributions by CRAP to those made by employees. Year after year CRAP’s contribution requirements dwindled and then a vesting period was imposed to get your hands on the shares whereas previously once the shares were awarded to you they were yours. Eventually they terminated the plan without raising salaries. Perhaps that inebriated Bleedco guy on the elevator had more truth than the vodka fumes would otherwise suggest. When you sell a company you cut costs down to the bone so your profit looks bigger than ever. A stock purchase plan with generous matching contributions by CRAP made CRAP a more expensive acquisition target…less of a bargain you might say.

CRAP’s institutional division was really doing well running from fourth position to a dead heat with the competition for first place all done in just short of a decade. Profits had quadrupled in 10 years. To be part of the team that accomplished this was rewarding to many employees despite no true financial rewards being extended to CRAP employees contributing to this remarkable growth.

All in all, I had an enjoyable time working in the business unit aside from the service campaigns and the poor compensation.

Then three things happened that caused me concern.

The first was that a new Vice President, Myra Pigall, was appointed for our division. She had no experience in the industry as she had been an accountant in her previous positions and spent all her time behind closed doors. She started interviewing employees asking them what they did. Suddenly there were a rash of terminations. Once again cost cutting and cleaning up. As a target for purchase a business unit making a billion dollars in profit with a low expense ratio is more attractive for a purchaser than one with a higher expense ratio. It soon became obvious Pigall’s snout was rooting out expenses to be trimmed like a pig hunting for truffles.

The second event was the termination of Beluga as CRAP’s General Counsel and his replacement being Felicity Poker. Poker was a hot shot corporate lawyer with a law firm that was Bleedco’s major external law firm in Calgary, Ooze & Ooze. I was commandeered into her Legal Department and no longer reported into the business unit.

The third was dealing with a major client of CRAP that wanted a refund of expenses it had paid us as a recordkeeper for its pension fund. Ooze & Ooze was CRAP’s legal counsel for this matter. The lawyer from Ooze & Ooze, Brian Cochon, had stated to me, “You repay that money or we will have you terminated.” I assumed “you” meant CRAP. As Cochon was once a partner with Poker at Ooze & Ooze my assumption should have immediately be seen as incorrect.

Published by Robert K Sephen (CSW)

Robert K Stephen writes about food and drink, travel, and lifestyle issues. He is one of the few non-national writers to be certified as a wine specialist by the Society of Wine Educators, in Washington, DC. Robert was the first associate member of the Wine Writers’ Circle of Canada. He also holds a Mindfulness Certification from the University of Leiden and the University of Toronto. Be it Spanish cured meat, dried fruit, BBQ, or recycled bamboo place mats, Robert endeavours to escape the mundane, which is why he has established this publication. His motto is, "Have Story, Will Write."

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: