Carson's attire, business acumen set him apart

By Rita Papazian
Posted: 03/04/2009

In retirement, the life of David Carson, former People's Bank chief executive officer, is the microcosm of the way this country should be running. As longtime head of one of the largest bank in one of America's wealthiest state where he balanced his banking responsibilities with leading a charge to improve public education and the arts. Carson still believes one has to have a good business plan before dishing out the dollars.

Today, Carson, a former resident of Fairfield, is an investor in two start-up companies that are doing well; is co-producer of a movie, "The Golden Boys," set to hit the theaters in April; co-producer of a music festival in the south that is expected to bring the personal involvement of Eric Clapton; and is business consultant to a restaurateur, Mac Hay in Wellfleet, the popular artistic and seashore community on Cape Cod, where Carson and his wife, Sara, of nearly 50 years, have a second home.

While he may have retired from his 17-year career at the helm of People's Bank, which is now People's United Bank, this septuagenarian is far from literally sitting on his laurels. Instead, he has just turned his attention to a variety of cultural and business projects that draw upon his many decades of experienceboth in the insurance and banking industries and a pillar in two major state urban areas, Hartford and Bridgeport.

In a recent telephone interview from his home in Hartford, to discuss a new published biography, "Bow Tie Banker," written by Lennie Grimaldi, which chronicles his "unconventional rise as chief executive in the banking industry," Carson answered questions about the current economic downturn and President Barack Obama's approaches to stem the tide through the stimulus package and bailout money to the banks.

"I'm just an observer," said Carson, however, noting that he doesn't see any kind of a plan that is being presented to the American public.

"I would never invest without a business plan," said Carson, referring to the businesses to which he has given his money as well as his business advice.

If the stimulus plan were any good, he said, "You would see the markets stabilizing. They have to do more. They are not forcing banks to submit a plan." If the federal government has a plan, he said, the public is not seeing one.

Carson said if Obama believes his ideas are any good, the president "is not articulating them. If they have a plan, they are not telling the public."

In an e-mail response to additional questions about the Obama administration's approach to turning around the economy, Carson wrote: "Obama's plan is not well defined. Mortgage accounting should be changed. When there is no market, marking to market does not make sense and leads to the write downs of value that destroys the balance sheets of institutions that are holding mortgages and mortgage-backed securities."

How does he feel about the tax cuts for the middle class and tax hikes for households with income of $250,000 or more? Carson said: "Taxes are essentially a political game and cannot be valued on an objective, rational basis until the final law is passed and the public finds out who the winners and losers are. I have been paying federal taxes for over 55 years and have never found them rational! They are purely political. I don't expect any change that will make sense!"

He said, "Sending money to banks as a 'bailout' without a business plan is folly! The plan should come first and then the money."

Carson blames the banks for their own undoing. They succumbed to power and greed and grew themselves too large. As a result they lost touch with the banking business they were supposed to engage in and lost touch with their banking customers, to whom they should have maintained a personal relationship and delivered the banking services that customers expect. And while they were delivering banking services to their customers, banks should have been growing their assets.

Instead, the banks were financing houses 100 percent of value and giving mortgages to people who couldn't pay back the loans. When this happens, said Carson, "You are asking for trouble."

What is wrong with the economy today and what is wrong with the banking industry as evidenced by the problems of the large banks, who became too "gigantic" and operated by the numbers, not the people, is directly counter to what was right about Carson as he climbed the ranks in the insurance industry and then shifted careers to fill the position of president and then CEO of People's Bank in 1983.

Carson can well understand the economic tsunami today. He survived what Grimaldi described in the biography as "Amageddon" in the early '90s.

Grimaldi wrote: "The recession of the early 1990s did not discriminate. It wiped out small businesses, all the way up to corporate institutions, including longstanding banks. There goes Citytrust Bank say goodbye to Mechanics & Farmers sayonara to Connecticut Bank & Trust. New England's economy was in economic freefall and economists estimated that the six-state region lost approximately 250,000 jobs in two years."

According to Carson's biography, a combination of factors contributed to the recession, including changes in federal legislation, financial seduction, greed, fraud and incompetence. According to Grimaldi's biography, one of those teetering on the brink of financial disaster was real estate developer Bob Scinto, who at one time had owed People's $37.5 million. His breakthrough came in 1991 when American Skandia rented 39,000 square feet of space, which stabilized Scinto's cash flow leading to his company's financial recovery and ultimate success that the Shelton-based company is enjoying today.

In the interview, Carson, who succeeded Norwick Goodspeed as CEO following Samuel Hawley's tenure, talked about how he was able to move from the insurance industry where he was an actuary with The Hartford before taking a position with a much smaller insurance company, Middlesex Mutual Assurance, where he saw a quicker trajectory to becoming the company's CEO than at his former employer.

The key in changing industries he said comes in how well an individual can lead the company in the first five years. This sets the tone of leadership and more importantly the direction the company will head in. When the recession hit in 1990, Carson was ready.

By the end of 1992, People's was the only Bridgeport-based bank standing and the largest one headquartered in Connecticut.

When he took the helm, Carson, who was considered an outsider for unlike his predecessors he had not come up through the ranks made changes to better serve bank customers. Soon after his arrival, he introduced employees to technology by taking the first step. He started eliminating typewriters and eventually banking services went online. In 1993, People's began placing its banks inside Super Stop & Shop so that customers could do their banking seven days a week.

In discussing his transition from insurance to banking, Carson said the success of it depends upon what an individual brings to the new position. He said bringing in an outsider has its advantages. Potentially, the move brings a fresh look into the company. "A lot of industries can be very parochial and don't look at themselves." For example, he cites the introduction of technology, a step he had taken when he was CEO of Middlesex, to demonstrate how technology can improve productivity in business.

"You see something and you say, 'Why are you doing this?' And then you say, 'What would happen if we do it this way?'"

Carson credits that way of thinking to having a creative mind. He believes it is very important to bring new ideas into the business environment early, and if they are successful, new patterns will be established. By 1989, he had built a team that was in place to confront the recession a year later.

"Life is a continuing educational experience. The world is not going to standstill," said Carson, who during his tenure at People's was instrumental in the bank establishing financial programs to support its employees seeking higher education. He also believes that people should recognize when opportunities present themselves.

As an outsider in the banking industry, Carson knew he had a lot to learn. He advises the best way to learn on the job is to listen to people. And Carson does listen carefully so much so that he has been characterized as someone who is slow to respond. The reason is because he is listening. His mantra is "Listen, Learn and Lead." It is in that order. "You have to shut up and listen. If I ask someone a question, I have to listen to what they are saying It is not a knee-jerk response."

To understand Carson's drive, one has to understand his background. He is an immigrant from Liverpool who came to this country in 1938 when he was 4 years old. His father, with no education, rose to become president of the National Surety Corporation in Manhattan, just eight years after the family migrated to America.

Volunteering, hat he did not have a Ph.D. or a master's degree, Carson said, "It's who you are and what you are willing to do that's important."

With "Bow Tie Banker," the reader comes away with a litany of accomplishments that Carson was willing to do, not only to keep People's Bank afloat during the recession in the early 1990s but also to help the City of Bridgeport come out of its own economic downturn. In his career, he has been involved "in everything from neighborhood block watches to talking to the chief of staff of the president of the United States about banking legislation.

When Carson joined People's Bank he stepped into the financial industry which he described as "pretty grey." He set out to change the complexion just as he had in the insurance industry. One who had the habit of wearing a bow tie once or twice a week, Carson decided to wear a bow tie every day. The bow tie set him apart from others and set a tone for how he was perceived. He stood out. He had a flare about his attire. He said he didn't realize at the time that the bow tie would be such a signature for him.

"People want to know who the leader is," he said, which becomes important when dealing with the media. Never one to shy away from the cameras or reporters, Carson learned early from his father the importance in wearing a good tailored suit. When he graduated from the University of Michigan his father introduced him to his tailor. '"A good tailor will always make you look good,'" his father said.

Summing up his philosophy about his appearance, Carson said, "If you're going to do it, you might as well enjoy it." This, no doubt, sums up this bow tie banker's career as well.