Will Glaser Steer Marsh Back On Course In Time?

Daniel S. Glaser says he couldn't wait to get started as the new chairman and chief executive officer at Marsh. He certainly will have his hands full as he begins his job today, but the bigger question is whether he can turn the troubled brokerage around quickly enough to save the job of his embattled boss–Mike Cherkasky. I think not.

Mr. Cherkasky, president and CEO of parent company Marsh & McLennan Inc., put the wrong person into the job when he hired Brian Storms, whose tenure–to be generous–was uneven, with far too many missteps for a firm struggling to regain its footing following allegations of bid-rigging and contingency fee abuse.

Mr. Cherkasky had no choice but to throw Mr. Storms to the wolves (better known as the shareholders, who were understandably upset with MMC's poor performance, and the analysts, who beat on the mega-broker like it was a piata).

At first blush, Mr. Glaser appears to be the right person for the job. He has come full circle, having launched his insurance career as a broker at Marsh in 1982. After a full decade working for Marsh in New York, London and Saudi Arabia, he was stolen away by rival Willis for eight years, where he served as president and chief operating officer of Willis Risk Solutions, the firms large-accounts practice.

He then crossed the road to the other side of the industry in 2000, joining another major brand name–AIG. That's where he was when Marsh sounded its siren song for his grand return.

Mr. Glaser's global view, his comfort level working at a mega-brand, as well as his experience on both sides of the fence–brokering and underwriting–should serve him well as head of Marsh, which is facing the stiffest challenges in its history.

He takes the helm at a time when the firm has yet to recover from the loss of some $1 billion in contingency fees, with a deepening soft market undermining the top line on standard commissions. And, of course, there is the lingering reputational damage to overcome–not only with suspicious buyers and jumpy shareholders, but with a battered and bruised employee base as well.

Mr. Glaser's mission is formidable–to restore Marsh's tarnished brand image with buyers, restore confidence in the firm's future with rebellious shareholders (as well as among skeptical analysts–including yours truly), find a way to somehow grow the top- and bottom lines in the middle of a weakening commercial market, and rally the confidence of his demoralized work force.

Good luck with that.

My sense is that Mr. Glaser will add stability and even more important, credibility, to what has appeared to be a sinking ship. Everyone (except perhaps his competitors at Aon, Willis and Gallagher) is certainly rooting for him.

But I doubt whether Mr. Glaser will be able to pull off a dramatic turnaround in time to save Mr. Cherkasky's job.

Mike Cherkasky was the obvious choice to grab the wheel when MMC, driven off course by shameless shenanigans at Marsh, was out of control and at risk of being destroyed by then attorney general (now governor) Eliot Spitzer.

Mr. Cherkasky's former association and continuing friendship with the firm's chief prosecutor gave the government confidence that the company was committed to making things right, and helped pave the way for a reasonable settlement of bid-rigging charges.

But when it comes to dealing with the long-term fallout of MMC's regulatory problems, the case to have Mr. Cherkasky in charge is certainly not open and shut.

Perhaps no one's management could have avoided MMC's recent struggles, but just like in baseball, when the team wins, the manager usually gets way too much credit…and when they lose, they no doubt get too much blame. More often than not, however, the manager gets fired if the team is not performing.

I suspect a more civilized transition will take place, with Mr. Cherkasky stepping aside “voluntarily” at some point next year if the firm's quarterly results fail to improve. He will get a well-deserved pat on the back for a job well done for seeing to it that MMC at least survived the Spitzer probes. But unless there is a miracle, I doubt we'll see Mr. Cherkaksy in the same position next year at this time.

What do you folks think??? (For more on Mr. Glaser and the challenges he faces, click here.)