Say Yes Before You're Ready: Capital Group CEO Mike Gitlin

0:00A CNBC original podcast. In 2014, Capital Group called Mike Gitlin with an opportunity. His first answer was no. I thought I would spend the rest of my career there and then got a call from Capital Group. But Capital Group was asking him to do something unusual. The firm had spent decades building leaders from within. Now it wanted an outsider to help build a major part of the business and change how one of the world's largest asset managers thought about growth. Gitlin told them what it would take. We're probably going to do these 15 things. And it's going to cost hundreds of millions of dollars.

0:41And he said, great, go build it. That decision would eventually put Gitlin on the path to becoming CEO. But it was not the first time his career had been shaped by stepping into the unknown. Being willing to put yourself out of your comfort zone, It can pay off if you really lean into it. He moved his family across continents, lived in 15 homes over three decades, and learned that the biggest opportunities often come before you feel fully ready. You got to figure it out. These are Mike Gitlin's executive decisions.

1:16You have this extraordinary, overachieving family group. You, your brother Dave, your eldest brother Jeff as well, all incredible overachievers. Dave, CEO of Carrier Group, you, CEO of Capital Group, Jeff, high up in consulting. Is there something in the DNA or is it something in how you grew up? Probably the latter. I think we were fortunate to have parents who liked to have a family dinner. And I say that in jest, but not really. I mean, we had a family dinner every single night. So my father was a lawyer. And when he came home, whether it was at 6.30 p.m. or 8 p.m., that's when dinner was. And the conversations we had at dinner, it didn't matter if you were nine years old and you just came off the soccer field and you just were still dirty and you were ready for dinner.

2:08It was going to be a substantive conversation at dinner. And I think a lot of that's gone today. It's just hard for people to do that. There's so many distractions. We didn't have that exciting of a life. We didn't have a lot of distractions. So early on, we had to be able to communicate and share a point of view. And I think it was building EQ before EQ was a thing. There was an intentionality around public speaking and conveying your ideas and listening to other people. It was really intentional on his part, I think. Was it tough or actually was it enjoyable? I can imagine you've got these two smart brothers.

2:46You're a smart guy as well. You've got your mom. You've got your dad as well. Richard's a lawyer, was a lawyer. And just kind of, was it adversarial? Was it fun? It was fun. It wasn't really competitive, although you probably wanted to be prepared. If you had a choice of being ill-prepared or properly prepared, you would choose the latter. There were topics. I remember it would be 1980 and there'd be a presidential election and you're 10 years old and you're debating which candidate you would choose and why. And the answer, because, wasn't a great answer. So you really had to think. My father being a lawyer, he would have a mock trial by the fireplace.

3:23So instead of watching television, you would be the jury and you'd be the prosecutor and you'd be the defendant. And he would just make up a story and you'd have to conduct a mock trial around the fireplace. I mean, that's an interesting way to grow up. That's an interesting childhood. Yeah. What was he preparing you for? Do you think he was trying to train you guys for something specific in life or actually just to be free thinkers? is? I think more of the latter. I think more of free thinking. How do you conduct yourself as a human being? When you're faced with adversity, when you have to answer a question, when you're communicating with other people, when you're trying to get people to align with your point of view, when you have to listen instead of speak, all of those things that build you as a human being, more than a leader, just as a human being.

4:10I think he was trying to get us all in that mindset early on. And he was a deep thinker. He still is. Fortunately, he's still with us. He's in his 80s. But he was an intellectual. He's a deep thinker. And he wanted us to just be able to think with a certain capacity. Did you, from an early age, want to be something, know what you want to be? And I'll just say with a preface to that as well, I know for a fact that in the 80s, you were already interested in markets. Yeah. I mean, I was more interested in the markets than anything. I mean, again, it was newspaper, print newspaper. And I liked math as well.

4:45And so I would get the newspaper and just look down stock prices. I'd go front to back and just find different companies I knew and look at the price and look at how it changed day on day. And my father had a friend who was in the business and gave me a small amount of money and said, talk with him, discuss different ideas, and use it as a way to learn how to invest. And so I was doing that at the same time I was getting my driver's license. So I was very fortunate in that regard. And it really caused me to start thinking early on about what career do I want? Will you make money? Will you lose?

5:22How'd it go? Yeah, I would say it was a great education in knowing what you know and knowing what you don't know. I did very poorly. I I had no idea what I was doing. And so I was learning along the way, but it does show you DIY in the world of investing is not a great idea. Like doing it yourself and making it up as you go along, you're not going to get great outcomes. So I learned along the way about portfolio diversification and how to research an idea and how to ask questions. Because if you're just randomly picking names that you know, you're not really understanding what part of the cycle are they in?

5:59Are they gaining advantage? Are they losing share? You're just making it up. There's a lesson there, isn't there? In 2026, there's a lot of people who are getting on board and trends and trading a lot of money when they haven't got a clue what they're doing. That's quite worrying. Well, it's worrying and it almost never turns out well. Yeah. And that's the sad part of it is that there's often lulled into this sense of it's going to work out because it worked out for a little bit of time when I first started doing it. But over time, it's a bit like gambling. It doesn't work. So thinking about how you can have your money professionally managed or at least follow something, some pattern, as opposed to just the meme stock craze, I think is probably a good idea.

6:43I know that you started hedge funding when you were 22, but there's a gap in between. Going to university, I stopped doing the investing and focused on studying mostly. What did you study? I studied history. And it's one of those benefits if you do know what you want to do. I don't think most people do. But I figured I'm going to do this business that I'm in today for the rest of my life. Let me do something that I probably have no business doing. Nowadays though, to study history, to study languages, and then end up on Wall Street as part of a graduate program or a junior trader, that's going to be hard to do, isn't it?

7:20Is that wrong? You know what? It's been hard to do for the last 20 or 30 years, but I think it's coming back. I think you're going to start seeing hiring managers look for as much EQ as IQ. I really believe that. With AI commoditizing a lot of the intelligence part of IQ, the EQ part, and back to my family dinner of listening, communicating, being able to speak, being able to convey an idea, being able to influence, that's going to be so much more important than whatever answer you need. you can type in and get in two seconds. So you've started in financial markets and you worked at a hedge fund.

8:01Actually, that's a really good story, I think, about what the hedge fund said to you about when they moved you from the back office, isn't it? Tell me a little bit more about that because it's a lot about people's careers, which is more luck than judgment. And I think this is a great case in point. Well, at that time, I was asked to trade overnight. So if you're in hartford connecticut and you're trading the asian markets it's from four or five in the afternoon until two or three in the morning not what every 23 year old longs to do be up in the middle of night is the only one in the building in a dark office i've got i've got a quote here you were the only person apart from the security guard that is a true statement and the cleaning folks and me and we were the only people in the building but i was i had the opportunity at that time the Asian trading side had some room for improvement.

8:49So the head of the firm who said, do you want to start trading? I said, why? He said, even if you don't know what you're doing, it's probably going to be okay. Something along those lines. And I think I had an opportunity, you get this blotter, an old blotter printed out, and you see the trades that you have to buy and cell in Asia. I didn't even have the phone numbers of the people to call. So I'm trying to call people in New York to get people's numbers in Asia so I can transact stocks and bonds in Asia in 1993, 1994. You're just thrown in the deep end. You got to figure it out. And I think there's a lot in there.

9:29Just figure it out. And getting the opportunity to do that in your early 20s probably doesn't happen as often today as it did 30, 35 years ago, but it makes you grow up really fast. I had a similar experience. Young trader, early 1990s. My boss, who was a fantastic trader, way better trader than I ever was, handed me his book and moved on to it. And I was like, this is yours now. You go, good luck. This is yours, my friend. I didn't lose him any money, but I certainly wasn't as dynamic as him. It is amazing being thrown in the deep end. It's a great lesson that folks who are young, sometimes older folks look at them and say, well, they're still so young.

10:12It'll take some time. If you give them an opportunity and you find the right people and you really give them a chance to show what they can do, they'll surprise you. It's one of those lessons I've had. And I probably err on the side of giving opportunities to folks earlier rather than later. Just knowing if you have that chance, a lot of people are going to shine.

10:38In terms of when you've made a big mistake, how are you with that? Have you changed over the years of how you approach failure? I think so. I mean, probably not in that I'm always hard on myself, but probably more acknowledging that's part of the business. Like perfection's not the standard. And I think the other thing you learn more and more, not you, me, learn more and more over time is failure is okay. If you just are self-aware, acknowledge it, understand what you did wrong and move on. And that fast fail self-awareness is really important. I think I've gotten better at that over time, but I think the better you are at that, the better of a leader you become.

11:22In your formative years, I've got a note here that says your time you spend in Asia are really important to you. You've moved from Hartford, Connecticut and down the road, you ended up in Singapore and then Hong Kong. Tell me a little bit about those experiences. Well, I'll tell you my wife is the same because we have lived in 15 different houses over 30 plus years. We've moved around a lot. I think being able to go to Asia in your mid-20s and be given more responsibility than you probably do is an incredible opportunity. Just think about that. go halfway around the world and lead this business?

12:02Who gets that opportunity? And so I think early on, I was willing to do whatever it took to get a new experience. My wife was a lawyer. And I came home and said, I know you've only been a lawyer for a short period of time, but we have this opportunity to move to Asia. Do you want to do it? She hadn't been to Asia. And we get on a plane and land in Singapore and she finds an apartment and I go to work. So I think taking those opportunities at 23 and 26 and 29 and being willing to put yourself out of your comfort zone, it can pay off if you really lean into it. And it was an incredible opportunity when I think back to it.

12:42Did your wife have to sacrifice her career? Yeah, absolutely. So that's a huge ask. And it's a huge ask. And the answer wasn't an immediate yes. We had to discuss it. I mean, she went to law school. She was an assistant district attorney in New York. smart lady and said, you know what? Let's do it. And that's a lot. That's a lot. And it's a privilege when a partner - Privilege. I don't think, dare I say it, and I'll say it, I don't think enough men appreciate that. Without being self-deprecating in any way, there's zero probability I'm doing the role I'm in today if my wife hadn't been as selfless as she was, period.

13:1815 different homes in 30 years. That's really unsettling for the family, isn't it? We moved so much. I mean, and when the kids got older, we gave them a vote and we weren't the super democratic household that you would guess. So, but we actually gave them a vote when we finally moved from Baltimore to Los Angeles about 12 years ago. The kids were in eighth grade, 10th grade, 12th grade. So they were all getting older and they're teens. And we brought them in and said, what do you think? And I remember one of them saying, I think we've come to realize life's about a lot of different experiences.

13:54Let's just do it. That's so mature. That's mature for a 16-year-old. I wasn't that mature at 16. The obvious question, the obvious connection is, were you like Richard, your father? Because your father had these amazing debates with you, Dave, and Jeff around the table. Are you like that with your family? I think they would say yes. I mean, I think the kids' hardest interviews weren't their real interviews. They were the mock interviews before the interviews. I said, if you can get through the interview with me. And your wife's the lawyer as well. And my wife's the lawyer. If you can get through these interviews, you're going to do pretty well.

14:22Yeah, I think we took a page out of that book and raised them in a very similar way. And I hope they do the same, but they're going to put their own spin on it and hopefully do it better. To this day, are all your key decisions made between you and your wife for your career? 100%. 100%. I mean, where we're living in a few years back, our previous CEO said, why don't you spend a year in London? This was right around COVID. I just went home and said, you want to spend a year in London? And we were empty nesters at the time. And she said, let's do it. But all of them are made between the two of us.

14:58And they always have been. I've got to ask you. I mean, I've only recently conducted an interview with Lloyd Blankfein. His wife, Laura, again, absolute saint, also a lawyer. She never unpacked fully for her year in London. I take it your wife did unpack. She unpacked, but she's learned to repack and unpack a lot of different times. I mean, we've definitely been on the move. I mean, fortunately, in the last dozen years, we've been based in Los Angeles. Yeah, that must feel weird. Same place. Same, long as we've ever lived anywhere for 12 years. And it's going to be where we work till we retire.

15:33And I say we retire because it's a we. Yeah. So, yeah. Quick word on Hong Kong before we move on. Hong Kong mid-90s, pretty wild place. Crazy. Before the handover, a lot of friends and family have worked out there as well. That must have been a crazy place to bring up a young family because you're a young couple as well in the mid-90s. Yeah. So we started in Singapore was 96 and 97, mid-20s, no kids. Came back to the US for one year, had a kid, and then went to Hong Kong in 1999. with a one-year-old. And so Hong Kong was an incredibly dynamic place. I mean, for folks who lived there in the 90s, they'll all tell you there was so much going on professionally, personally, people having families.

16:24It was also party central. It was party central. I mean, there were plenty of times you'd go out late and you'd wake up early and then you'd do the same thing again. I mean, it was a full contact sport in the 90s. And so we had a great time. When the kids were then one, three, and five, we moved to the US, back to the US. And it was probably a good thing too. I mean, we were in our early 30s and maybe ready for a little bit different family life than the crazy Hong Kong days in the late 90s. Tell me about the next big decision you made. Well, I'm assuming moving to T. Rowe Price was part of that.

17:02Just give me a bit more color on that period of your life. Yeah, it was a counterintuitive move, one I hadn't really considered. I'd been on the sell side. I'd been at Citigroup. I was enjoying the role. And there was an opportunity at T. Rowe to go lead the trading group. And to me, part of it was moving back to the buy side, moving to an investment management firm rather than a broker dealer. That was a big driver. T-Row was a great company. I enjoyed our time in Baltimore. We all did. And hadn't really thought about leaving, had thought I would spend the rest of my career there. And then got a call from Capital Group and said no.

17:47Said I wasn't really looking to move from T-Row and I had these teenagers. And our now retired CEO is a very convincing gentleman, Tim Armour, said, well, why don't we just sit down and chat? And that was the beginning of my ultimate move to Capital Group. Why? What did he say to you that made that decision easy for you or even less difficult? Well, one, you know, Capital Group was private. T-Row was public. There was a difference in that in terms of the ability to manage the business for the long term. And the other part was the financial wherewithal to invest in the business. I had said to him, look, if you're going to hire me, and he was looking to hire me as a head of fixed income for capital group at the time, I said, we're probably going to do these 15 things.

18:37And it's going to cost hundreds of millions of dollars. And we're going to consume billions of dollars of seed capital as we're growing this entity for clients. and he said great and i said great meaning it's sort of good and we're going to do a little bit of it or you're going to see how it goes as we go along and he says we wouldn't hire you if we didn't trust you to build it go build it which is which is an incredible thing to say this is incredible and this is quite huge and i guess in many ways this is the pivotal part of our interview as well because you've got this institution which has a couple of trillion under management they are admitting despite the fact that the guy who's hiring he's been there 40 years, Tim Armour?

19:14He retired after 40 years, yeah. 40 years, privately run company, publicity shy, shunning the idea of stars as well. Founded by Jonathan Bell Lovelace in 1931. You've got this old, I don't want to say stayed, but set in its way institution that realized that it needed to change and they wanted you to be a major part of that. That's a big decision. Well, I think it's a huge decision. It can be disruptive, right? It can be culturally disruptive to a company. People can wonder what's happening. Part of the interview team was the existing team that I would end up leading, which I thought was great.

19:51You're able to sit across from someone who's interviewing you who's going to be on the team that you've been asked to lead. You can ask them questions too, like, are you guys in for this? Are you being dragged along or is this something you're passionate about? And I was so impressed. And this is not a Capital Group commercial, but I was just so impressed with the answers I got from the team saying, we're ready. We're excited. So it was a leap of faith in a lot of ways because it's not how Capital Group has historically been managed. And I give Tim credit and the whole leadership team credit for then not wanting that and then putting the handcuffs on you.

20:29You can want it and then the person comes in and you could gate them at every step. And that wouldn't produce the same outcome if you gave them a lot of empowerment back to our earlier part of our conversation. I have seen so many CEOs go into companies. When they get in there, they get their feet under the desk. They say, we need to change. I know things need to change. I've seen my share price or I've seen the value of the assets and the management. But it's amazing that this company knew they needed to change and looked outside as well for that. Despite the fact that they have all these incredibly talented people, very low turnover at the company, very traditional company.

21:04They look to you to kind of be the galvanizing force in that change. That's extraordinary for them and for you. Well, I think, quite honestly, I think more for them. I mean, Capital Group was not a company that did a lot of external hiring. It was a grow from within company. So I think that's right. And the recognition that to be a great global asset management company, you had to be a great fixed income manager. And to do that, you had to have a full-time business leader to help put all the pieces of the puzzle together. that's a big leap for a company of any company to take let alone capital group and I just think back to the collective success we had and we've been fortunate to have good success but it came from the leadership at the time doing something different stretching their minds giving the flexibility and the empowerment for you to really drive I mean those things are a great lesson for any leadership team to i remember satya nadella ceo of microsoft he was in a group and he was chatting with a bunch of us and someone asked him about lateral hires and he said at microsoft we used to think the problem with lateral hires was the lateral hire until we realized it was us until we realized the way in which we integrated and absorbed them was the problem not the people And once we figured that out, we got a lot more from our lateral hires and our success rate went up.

22:38And I think at Capital Group, we've done the same thing. It hasn't been a perfect journey, but a lot more lateral hires have been joining and empowered to help make us better. Not just integrate into the culture. Because that can often, at a private company, come in and we'll teach you. But that's my point, Mike. It seems that they realized the culture needed to change. and actually the lateral hires were the answer, not actually bringing them in and then becoming the same problem. Well, I think the way I would frame it is very often with companies with strong cultures, people get asked, how do you preserve the culture?

23:20And I always smirk at that question. I think it's the wrong question. The question should be, what are you doing to improve the culture. Preserving the culture, there are core values that you want to preserve, but the culture evolves over time. And I think the company realizing, let's find some external talent. They've done things differently. We have some great people here. If we marry the two, we might get the best of all worlds. And I think that's a statement in itself, sort of that mindset.

23:56When you joined 2014, all of a sudden, you and your family have got a base which you're going to spend for the first time in years, despite that you've moved around so much. And when you became CEO, there's a nine-year gap there as well. Tell me about your best decisions in that period. The best decisions as it relates to growing the fixed income business, they were all about what's the right infrastructure for the very long term. Nothing about quick wins. How do we build the right infrastructure for this business for the next 50 years, not the next quarter? So anytime you have the luxury, and I want to use that word, I had the luxury when I was working together with my partners in fixed income to build the right infrastructure and foundation for decades as opposed to quarters, you're going to do a lot of things right.

24:49But not often do you have that luxury. People are measuring you by every quarter, by the quarterly public earnings. I think that can do a company a big disservice. We had the ability to build this for the long term and that's what we did. So the best decisions were the longest term decisions we could make. You said it wasn't the perfect journey. Can you give me an example of something that went wrong or right or you didn't get it quite right? I think the hardest part, it's always people, which people are along for the journey and really want to be passionate about doing something in a different way.

25:23And which folks say, you know what, it probably is the right thing, but it's just not for me. I think whenever you have people-related decisions, it's the hardest decisions you make because they're human beings. And sometimes big companies lose that perspective. Someone who's there or someone who's not there, that same person may have a family and this whole world outside of the company that the moment it's disrupted, disrupts their whole lives. So I think the first couple of years, just making sure that everyone was on the team and driving to the same goal, there were a few folks who left here and there.

26:06And that's never easy. It's important to do for them and for the company, but it's never easy. From an early age, you knew how to debate. You knew how to put forward a very forceful view to get yourself heard with your amazing, smart mom and dad and your brothers as well. Do you think you always got it right in how you handle people? I've had guests on this podcast that have said, if I'd have known I was going to get to the top, I might've treated people differently on the way I don't think anyone gets it right. If any of your guests said they get it right every time, you've had a liar on this podcast.

26:42Thankfully, none of them. So I don't think everyone gets it right. I think you make a pattern of mistakes that hopefully you learn from. Not listening enough, arriving at a decision too quickly without reading the room. Those are some early mistakes that I would make. even today in our 360 feedback, the number one piece of feedback I always get personally is, have you arrived at the decision before any of us got a chance to weigh in? And that's something I got to keep working at. And so there's feedback we all get through lies. The one, if I'm going to get better at one part in particular, it's making sure that happens, that you're always hearing out.