After long process, Mark Kim right choice for MSRB CEO

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Market participants overwhelmingly think the Municipal Securities Rulemaking Board landed on the right person to lead the organization after a lengthy process.

Kim, MSRB’s chief operating officer, was announced Tuesday as the new CEO starting on Oct. 1. After a year-long process, the board went with an internal candidate. After Former CEO Lynnette Kelly left the MSRB in August 2019, the MSRB hired executive search firm Spencer Stuart. Though going through a lengthy process to find a new leader to go with someone on the inside may seem cumbersome, market participants said it was worth it to find a good candidate.

“An organization that is this important owes it to itself and to the public to do a thorough search and there is nothing wrong for them at the end of the day saying, we’ve got a guy that’s got the qualifications plus the inhouse experience and that seems to be what they’ve done,” said Chuck Samuels, counsel to the National Association of Health & Educational Facilities Finance Authorities.

Samuels called the process of finding the new CEO rational and said Kim has deep experience in public finance and technology.

“There’s always an argument for continuity as well as for bringing in fresh blood, but I think when you have an excellent candidate and you’re in unusual times, there is certainly a good argument for going with the guy that you thoroughly know,” Samuels said.

Samuels said though an inside candidate was picked, that does not make the process a waste.

“I accept that it was a legitimate and intensive evaluation maybe, frankly, prolonged because they wanted to make sure that they went with the in-house candidate that truly was the best.”

A wide variety of candidates were interviewed, Samuels said, from Washington to non-Washington types and lawyers to issuers to state and local government officials.

The MSRB declined to comment on other candidates.

Kim’s appointment to CEO comes as many leadership positions at the MSRB have yet to be filled full-time, including chief regulatory officer and chief education officer. Kim also will ride through the process of decreasing the MSRB board size to 15 from 21 members over the next couple of years.

“He needs to repopulate the staff,” Samuels said. “I’m sure he knows that. He needs to reinvigorate the relationships with the various stakeholders. I’m sure that will be high on his list.”

Samuels noted that Chief Financial Officer and interim CEO Nanette Lawson kept “the ship afloat” while the MSRB lacked a long-term leader.

A large executive search firm like Spencer Stuart on average costs about $100,000 per search or might charge as much as 35% of the first-year total compensation of the final candidate, according to advertising for other executive search firms. The MSRB declined to comment on how much they paid to retain Spencer Stuart, and the firm declined to discuss its fee structure.

The MSRB probably knew Kim was an obvious choice as the next CEO and it was not surprising that he was picked, said Ben Watkins, director of Florida’s Division of Bond Finance.

The MSRB probably knew CEO pick Mark Kim was the obvious choice, Ben Watkins, director of Florida’s Division of Bond Finance

“Mark is such a strong candidate,” Watkins said. “It’s not surprising that they came right back in house, but you’ve got to go through the process first.”

Hiring and paying to retain a search firm is standard in the process and especially in the public sector. Watkins said he gets why people may “bristle” at spending money for a firm to hire someone from the inside, but said it’s standard to bring all resources possible to the table, he said.

Kim has a lot on his plate amid the plans to improve MSRB’s technology to strengthen its data collection efforts. Kim’s experience in technology makes him an ideal pick, said Gregg Bienstock, CEO and co-founder at Diver by Lumesis — a municipal market software and data company.

“The fundamental move of going to the cloud is critical to what the MSRB does with its information and EMMA platforms on a prospective basis,” Bienstock said. “So you have someone who has that foresight and then you also have someone who has unique knowledge and experience based on where he’s been in his positions prior to assuming this role.”

Technology will be at the forefront with the organization recently having migrated all of its market transparency systems to the cloud.

Bienstock said Kim’s position will create more opportunities for companies like his and help them get better access to data.

The National Federation of Municipal Analysts said it wants to work with Kim to make more progress in modernizing EMMA.

“Mark is an approachable leader and given his time in the industry and at the MSRB, his appointment certainly alleviates the uncertainty that an unfamiliar selection would bring,” said Lisa Washburn, NFMA industry and media liaison.

Kim’s issuer experience was comforting to state and government officials.

Before coming to the MSRB, Kim was chief financial officer for the District of Columbia Water and Sewer Authority from 2013 to 2017. Prior to that, he was deputy comptroller for New York City and an investment banker at Goldman Sachs, UBS and Fidelity Capital Markets.

At DC Water, he received numerous awards including two Bond Buyer Awards, one of which was a $350 million century bond offering.

Kim was also on the Government Finance Officers Association’s debt committee for a number of years.

That will help Kim establish credibility in the issuer community, and is something he needs to do, Watkins said. In the past, issuers felt the MSRB was not responsive to their needs, he added.

GFOA plans to lean on Kim’s issuer experience and to work on finding issuer representation on the smaller board, said Emily Brock, director of GFOA’s federal liaison center.

“I look forward to working with him,” Brock said. “I can say he has been so accessible up until now that this is just an extension of how we’ve worked with him in the past.”

Bond dealers were also pleased with Kim as the new CEO.

“He’s the right guy for the job, with his experience as an issuer, with a broker-dealer, and the MSRB makes him the right person, so there is a lot on their plate and we really look forward to working with him,” said Mike Nicholas, CEO of Bond Dealers of America.

The Securities Industry and Financial Markets Association was also pleased.

“His broad experience in the financial services industry, as an issuer, and at the MSRB make him well-positioned to lead the organization,” said Kenneth Bentsen, SIFMA president and CEO.

The National Association of Municipal Advisors is eager to work with Kim.

“His breadth of muni experience, leading key MSRB initiatives over the years, and the long standing relationships he has with various participants are all major assets he brings to the organization and broader market,” said Susan Gaffney, NAMA executive director.

The National Association of Bond Lawyers said Kim was a good choice given his familiarity with the MSRB. A search firm also brings legitimacy to the process and a third party can give comfort on deciding on the right candidate, said NABL President Teri Guarnaccia.

“I commend them (MSRB) on taking the time to do a thoughtful process to confirm what they thought was the right conclusion,” Guarnaccia said.

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