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Only the Men Survive

Cruz’s elevation temporarily allayed concerns that women were being marginalized at the firm. She had become a role model to other female executives whether she wanted to be or not. They looked to her to see how to present themselves—she kept her hair short and wore no makeup, but she wore stylish slim suits and fashionable Narciso Rodriguez dresses. They also looked to her as an example of how to advance your career while raising kids. Cruz had had two more children by this point, and each time she returned to work within a few weeks of giving birth. When she was in labor with her daughter in 1988, she fielded a call from the trading desk to discuss positions in a particularly volatile market. Like many Wall Street executives, she sometimes worked sixteen-hour days, getting up at five in the morning and to work by six. But she found time to do traditional motherly tasks. When her daughter needed to bring cookies to school, for instance, Cruz got up at 4 a.m. and made them herself before going to the office.

She was one of those amazing women who seemed to be “doing it all.” But she didn’t want to advertise herself that way. There would be no appearances on Oprah or articles in women’s magazines. “No, my family comes first,” she told one female colleague. “And I will not subject anybody to this. I love my job, but I’m not here to broadcast it.”

Besides, publicizing her power only invited scrutiny from her enemies, who were growing in number every year.

Succeeding in the upper echelons of a Wall Street firm is as much a matter of nuanced power politics as anything else. You need to be good at the actual job, to be sure. But you also need to be good at favor-trading, strategic maneuvering, and convincing the board of directors that you’re good at your job. If Cruz had loved the black-and-white objectivity of being a trader, she was now stumbling into gray territory.

“He gets ‘Mack the Knife’ and that’s cool, and she gets ‘Cruz Missile’ and that’s bad?”

With Mack around, she was seen as a “protected species,” said one Wall Street woman. But Mack’s position at the company was shaken when hundreds of millions of dollars were lost in a series of bad high-yield-bond trades, and his influence was thwarted by CEO Phil Purcell, the former chief executive of Dean Witter who had taken control of the combined company after the merger. In July 2001, Mack left to become CEO of Credit Suisse. He tried recruiting Cruz to go with him, but she declined, citing loyalty to Morgan Stanley. That she would have found herself working with her husband, who was by then head of equity-capital markets at Credit Suisse, also had to weigh on the decision. The Wall Street power couple was already an anomaly; to share a home and an office might have made things too complicated.

And the situation was complicated enough at Morgan. Cruz’s new boss was Vikram Pandit, the Indian-born executive who was now co-president and COO. Pandit was not a fan of Cruz’s. They were cultural and constitutional opposites: she the vocal risk-taker, he the professorial conservative. He had come from the equities division, not fixed income like Mack and Cruz. And in the struggle for capital allocation among division heads, Pandit tended to favor the head of equities, John Havens.

But with equities rocked by the bursting of the Internet bubble, Cruz’s division became the growth engine at Morgan Stanley despite Pandit’s lack of support. In 2003, she increased revenues by 65 percent over the year before. Her compensation that year, with bonuses, was $16.1 million—larger than both Purcell’s and Pandit’s takes. By 2004, her division had grown revenues to $5.6 billion, constituting 14 percent of Morgan Stanley’s total income.

Pandit still wasn’t sold on Cruz. He pointed out that she wasn’t making as much as her competitors at other banks, namely archrival Goldman Sachs. Cruz argued that she could improve the bottom line if the company were comfortable with taking on more risk. “I’d be more than happy for Zoe to take more risk,” Pandit told a friend, “if I felt comfortable that she understood the risk she’d be taking.”

Throughout this period, Cruz was dogged by suggestions that she was unqualified to head her division. According to a person who attended several meetings with them, Pandit would antagonize Cruz in front of the other managing directors, causing her to shake with anger and frustration, wiping tears from her eyes. And during the annual managing directors’ dinner in 2002, a gathering in which employees performed vaudeville skits to poke fun at the leadership, Cruz’s division was described as breaking down into two parts: the “she gets it” part and the “she doesn’t get it” part. “It got the biggest wince and laugh at the same time,” says an attendee.