In May 2018, history was made when the NYSE appointed its first female president. At just 43 years old, this was no small accomplishment for Stacey Cunningham—but also no surprise to anyone who looked at the trajectory of her career up until that point. Cunningham’s first working experience was as an intern on the NYSE, but she quickly moved on and up to positions at the Nasdaq directing capital markets and heading up sales for U.S. transaction services.
She rejoined the NYSE in 2012 and was promoted to chief operating officer in just three years. Six months after assuming the NYSE presidency, Cunningham was featured in the BBC’s 100 Women, a series that examines the role of women in the 21st century, for her part in “crash[ing] through Wall Street’s glass ceiling.”
After starting as an intern on the NYSE trading floor and working your way up as a clerk, then a broker, you took a departure in your career path and attended culinary school. How did that experience shape you for your current role as the 67th president of the NYSE and the only female to attain that position in the history of the exchange?
Each of our experiences shape and define us, and it is up to us to hone our skills and apply them effectively. As an engineering student, I enjoyed math and science, but it was when I started my internship on the NYSE trading floor that I knew I had found an industry I loved. I was immediately captivated by the energy on the trading floor. It felt like a natural fit for me.
After a decade at the NYSE, I did the unthinkable and decided to leave. At the time, the NYSE leveraged both humans and sophisticated technology, but it was not as well integrated as it is today, which led me to explore other opportunities.
I never actually earned a living as a chef, but I did learn something new. While I was attending culinary school, I quickly noticed how similar the dynamics between the kitchen and trading floor environments were, which was part of the allure for me. The pace is extremely fast in both workplaces, and you learn to be accountable for your work, to work as a team, be direct in your communication, and make decisions quickly.
Attending culinary school was only one step in my journey, but that experience highlighted opportunities available if you are open to a non-linear career path. Many peoples’ careers take several turns, but you learn from each of those experiences. Every experience opens the door to new opportunities.
The CEO of your parent company, Jeff Sprecher, and you both share a background in engineering. How has that helped you with the NYSE?
I returned to the NYSE in 2012, only 10 days before the announcement that it would be acquired by Intercontinental Exchange (ICE). It raised some eyebrows when a 12-year-old company based in Atlanta announced plans to buy a 220-year-old institution.
Jeff Sprecher, ICE’s founder and CEO, built the company by identifying industries that would benefit from modernization and then anticipating market demands and responding with more efficient solutions and technology. Building a team that is able to take an analytical view was more important than finding people with deep industry-specific experience. Knowing the right questions to ask is often far more valuable than knowing the right answers. An engineering background can be helpful when you take that approach.
Right after the acquisition, a simple question was asked: “What can we keep that has unique value and where can we shift?” The outcome was a full strategy to modernize the NYSE. In the past three years, we renovated our building, rolled out a purpose-built, state-of-the-art trading platform called NYSE Pillar, introduced new markets to offer a variety of listing and trading choices to an increasingly diverse set of issuers and investors, and improved our host of services for our community of issuers.
You’ve credited Muriel Siebert, the first female to own a seat on the NYSE, as having a strong influence on you. In what ways did she impact your career?
Muriel Siebert bought the first female seat on the NYSE floor in 1967, and she was the first woman to head one of the NYSE’s member firms. It was a challenge for her, as there was significant resistance.
One of the most interesting things about the influence she had on my career is that I was entirely unaware of it. When I started on the NYSE trading floor, I had not heard of Muriel Siebert. At the time, I did not even think about the fact that I would not have had an opportunity available to me so easily, had she not blazed that trail. It was not until later that I recognized the profound impact she had on my career. This was an impactful lesson for me on the power and lasting impact of challenging the status quo.
What do you hope your legacy will be as president of the NYSE?
In order to ensure the public markets remain competitive with private sector funding, it is critical we have the right balance between investor protections and issuer flexibility. At the NYSE, we are focused on regulatory and legislative changes that reduce some of the barriers to today’s public markets.
If we strike the right balance, companies will more easily be able to raise the capital they need to expand their businesses, create jobs, and thrive, and, importantly, Main Street investors will be able to share in this wealth creation. U.S equity markets are the envy of the world, but to maintain our leadership, we must work together to create a more welcoming environment for today’s entrepreneurs.
How has the market volatility impacted the IPO pipeline and your issuers’ performance?
The U.S. equity market has been riding a bull since March 2009, rising more than 300 percent over the period. There is typically an inverse correlation between IPOs and volatility, but given the length of this bull market, we are actually seeing a sense of urgency from companies considering an IPO. In fact, we expect a strong start to 2019 as we anticipate a number of IPOs and new listings in the first half of the year.
Market uncertainty is always a concern for public companies, as is the negative impact market volatility can have on investor confidence. The NYSE market model is purpose-built to dampen short-term volatility. During times of market stress in 2018, NYSE-listed companies traded with 45 percent lower volatility compared to companies listed on other U.S. exchanges. We invest heavily in the market model because it leads to significant savings for NYSE-listed companies and their employees every time they are trading their own stock, and it saves their investors’ money every day.
The majority of the 225 U.S. REITs registered with the SEC trade on the NYSE. Why is that?
The NYSE is proud to be the home of over 90 percent of the $1 trillion market cap REIT sector. While companies have a choice of listing venues, a key reason REITs choose the NYSE is our unique market model.
Looking back to 2004, we have helped 115 of the 126 REIT IPOs access the capital markets. Our track record of flawless execution stems from the model of combining best-in-class technology with human judgment to reduce volatility and provide a level of protection not available on any exchange in the world. This is particularly important for IPOs, where the first public trade for a new company is critical and you have only one opportunity to get it right. Looking more broadly, the NYSE market model offers superior performance during complex transactions, which is why we have executed the last 25 consecutive U.S. IPOs raising $1 billion or more—four of which were REITs.
Beyond their initial listing day, REITs frequently access the capital markets to raise money and grow their business. In fact, REITs listed on the NYSE have raised over $53 billion in new equity through secondary offerings over the last three years. Similar to an IPO, the first day of public trading following an offering is incredibly important to a REIT, and this is where we provide even greater value to our issuers through our proven market model.
What other benefits are there to a NYSE listing for REITs?
The NYSE recognizes that the REIT community is a very unique, tightly-knit network of industry professionals that provide insight and value to each other. This is why we have partnered with Nareit to host industry events, most notably the NYSE/Nareit IR Symposium series, where we gather thought leaders and industry executives to discuss best practices, key business challenges, and potential opportunities. We have highlighted REIT milestones, including the 50th anniversary of REITs and the creation of the headline Real Estate sector in the GICS classification, and we continue to convene frequent roundtable discussions to ensure clients are staying current with new developments that may impact their businesses.
Many REITs also choose to use our iconic Wall Street meeting space to celebrate their own individual company milestones, host analyst days, or conduct board meetings.
Finally, our listed REITs have access to a robust suite of market intelligence solutions and NYSE Connect, our web-based market data portal that provides trading information, news, ownership data, research, and more. Most important, REITs have the added benefit of a team of industry professionals, including Ron Bohlert, our real estate sector lead, that focus on personally managing our listing relationships.
What do you see for the publicly traded REIT market moving forward?
REITs provide investors with access to investments that may have been otherwise unavailable to them. Increasingly, investors are looking for more choices in investment opportunities that allow them to diversify portfolios while maintaining the familiar nature of buying and selling products on a U.S. exchange and the protections that affords them. There are no signs of that trend slowing.
The NYSE seems to have a large presence on Capitol Hill. Why is this important to your issuers?
We play an influential role in advancing U.S. finance, and we are committed to being a strong voice for our community of companies on key policy and regulatory matters. Through regular dialogue and interaction with our issuers, we understand the challenges of being a public company, and we are working to advocate on their behalf to lessen those burdens.
One example of our advocacy efforts is our work to decrease the influence of proxy advisory firms. Proxy advisory firms can provide a valuable service to institutional investors who vote thousands of proxies each year. But our listed companies have had long-standing concerns about the mechanics of the process and some of the practices of these firms that need to be addressed.
In November, we were happy to report that our advocacy efforts began to pay off with the introduction of The Corporate Governance Fairness Act by a bipartisan group of senators. This bill advances the regulation of proxy advisory firms under the Investment Advisers Act of 1940. Working together with Senate leaders, the legislation strikes an important balance between the interests of our issuers and the value that proxy advisory firms offer to institutional investors. It will also place the oversight of these firms in the hands of the SEC and ensure that the information that they provide to their institutional clients is factual and unbiased.
In addition to the legislative progress, we saw regulatory progress as well as the SEC recently convened a roundtable discussion on proxy reform. Our efforts in Washington, D.C., will continue as we aim to improve the environment for our issuers.