Sanford I. Weill
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| Sanford I. Weill | |
|---|---|
Weill at opening night of the 2009 Metropolitan Opera's Tosca
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| Born | March 16, 1933 New York City, New York, U.S. |
| Nationality | American |
| Alma mater | Cornell University |
| Occupation | Banker, financier |
Sanford I. "Sandy" Weill (born March 16, 1933) is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, respectively.
Contents
[hide]Early life
Weill was born in the Bensonhurst section of Brooklyn, New York, to two Polish-Jewish immigrants. He attended P.S. 200 in Bensonhurst. He also attended Peekskill Military Academy inPeekskill, New York, then enrolled at Cornell University where he was active in the Air Force ROTC and the Alpha Epsilon PiFraternity. Weill received a Bachelor of Arts degree in government from Cornell in 1955.
Weill's middle initial of "I" is not an abbreviation for anything. Weill said:
My mother wanted to name me after somebody whose name started with an "I", but she couldn't think of a name she liked. So she gave me the initial with the idea that after I was 21 I could choose whatever middle name I wanted.[1]
Weill married his wife, the former Joan Mosher, on June 20, 1955. The couple live in Greenwich, Connecticut. They have two adult children, Marc Weill and Jessica Weill Bibliowicz, and four grandchildren.
Business career
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Weill, shortly after graduating from Cornell University, got his first job on Wall Street in 1955 – as a runner forBear Stearns. In 1956, Weill became a licensed broker at Bear Stearns. Rather than making phone calls or personal visits to solicit clients, Weill found he was far more comfortable sitting at his desk, poring through companies' financial statements and disclosures made to the U.S. Securities and Exchange Commission. For weeks his only client was his mother, Etta, until Joan persuaded an ex-boyfriend to open a brokerage account.
Building Shearson (1960-1981)
While working at Bear Stearns, Weill was a neighbor of Arthur L. Carter who was working at Lehman Brothers. Together with Roger Berlind and Peter Potoma they would form Carter, Berlind, Potoma & Weill in May 1960. In 1962 the firm became Carter, Berlind & Weill after the New York Stock Exchange brought disciplinary proceedings against Potoma.
In 1968, with the departure of Arthur Carter, the firm was renamed Cogan, Berlind, Weill & Levitt (Marshall Cogan, Arthur Levitt), or CBWL jokingly referred to on Wall Street as "Corned Beef With Lettuce". Weill served as the firm's Chairman from 1965 to 1984, a period in which it completed over 15 acquisitions to become the country’s second largest securities brokerage firm. The company became CBWL-Hayden, Stone, Inc. in 1970;Hayden Stone, Inc. in 1972; Shearson Hayden Stone in 1974, when it merged with Shearson Hammill & Co.; and Shearson Loeb Rhoades in 1979, when it merged with Loeb, Rhoades, Hornblower & Co.
With capital totaling $250 million, Shearson Loeb Rhoades trailed only Merrill Lynch as the securities brokerageindustry's largest firm.
American Express (1981-1985)
In 1981, Weill sold Shearson Loeb Rhoades to American Express for about $930 million in stock. (Sources differ on the precise figure.) In 1982, he founded the National Academy Foundation with the Academy of Finance to educate students that would graduate from High School. Weill began serving as president of American Express Co. in 1983 and as chairman and CEO of American Express's insurance subsidiary,Fireman's Fund Insurance Company, in 1984. Weill was succeeded by his protégé, Peter A. Cohen, who became the youngest head of a Wall Street firm.[2] While at American Express, Weill began grooming his newest protégé, Jamie Dimon, the future CEO of JPMorgan Chase.
Before Citigroup (1986-1998)
Increasing tensions between Weill and the chairman of American Express, James D. Robinson III, led Weill to resign in August 1985 at age 52.
After a failed attempt to become the CEO of BankAmerica Corp. (and "take over" Merrill Lynch, according to a Jamie Dimon interview in 2002), he set his sights a little lower and persuaded Minneapolis-based Control Data Corporation to spin off a troubled subsidiary, Commercial Credit, a consumer finance company. In 1986, with $7 million of his own money invested in the company, Weill took over as CEO of Commercial Credit. After a round of deep layoffs and reorganization, the company completed a successful IPO.
In 1987, he acquired Gulf Insurance. The next year, he paid $1.5 billion for Primerica, the parent company ofSmith Barney and the A. L. Williams insurance company. In 1989 he acquired Drexel Burnham Lambert's retail brokerage outlets. In 1992, he paid $722 million to buy a 27 percent share of Travelers Insurance, which had gotten into trouble because of bad real estate investments.
In 1993 he reacquired his old Shearson brokerage (now Shearson Lehman) from American Express for $1.2 billion. By the end of the year, he had completely taken over Travelers Corp in a $4 billion stock deal and officially began calling his corporation Travelers Group Inc. In 1996 he added to his holdings, at a cost of $4 billion, the property and casualty operations of Aetna Life & Casualty. In September 1997 Weill acquired Salomon Inc., the parent company of Salomon Brothers Inc. for over $9 billion in stock.
In April 1998, Travelers Group announced an agreement to undertake the $76 billion merger between Travelers and Citicorp, and the merger was completed on October 8, 1998. The possibility remained that the merger would run into problems connected with federal law. Ever since the Glass–Steagall Act,banking and insurance businesses had been kept separate. Weill and John S. Reed bet that Congress would soon pass legislationoverturning those regulations, which Weill, Reed and a number of businesspeople considered not in their interest.
To speed up the process, they recruited ex-President Gerald Ford(Republican) to the Board of Directors and Robert Rubin (Secretary of Treasury during Democratic Clinton Administration) whom Weill was close to. With both Democrats and Republican on their side, the law was taken down in less than 2 years. Many European countries, for instance, had already torn down the firewall between banking and insurance.[citation needed] During a two-to-five-year grace period allowed by law, Citigroup could conduct business in its merged form; should that period have elapsed without a change in the law, Citigroup would have had to spin off its insurance businesses. Weill's office holds a wood etching of him engraved with the words "The Shatterer of Glass–Steagall". Weill denies that the repeal of Glass–Steagall played a role in the recent financial crisis.[3]
In 2001, Weill became a Class A director of the Federal Reserve Bank of New York. Class A directors are those elected by Federal Reserve member banks.
Post-Citigroup
In 2002, the company was hit by the wave of Wall Street managerial restructuring that followed the stock market downturn of 2002. Charles Prince replaced Weill as the CEO of Citigroup on October 1, 2003.
In 2003, Citigroup repurchased $300 million worth of shares from Weill. It was reported among the $1.967 billion of "treasury stock acquired" in the Citigroup consolidated statement of changes in stockholders' equity. The average price Weill received for his shares was $47.14.[4]
Advocate for bank break-up
On July 25, 2012, Weill apparently reversed course on the financial supermarket and stated "What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that's not too big to fail," Weill said on CNBC. "If they want to hedge what they're doing with their investments, let them do it in a way that’s going to be mark-to-market so they're never going to be hit." [5][6][7]
Controversy
In 2004, Citigroup agreed to pay $2.65 billion to settle a class-action suit brought by investors over its role in theWorldCom scandal. Citigroup's Salomon Smith Barney had issued optimistic research reports on WorldCom and, at the same time, helped it raise money by selling its securities.[8]
After receiving $263.9 million from Citigroup for his 5.6 million shares, Citigroup and Smith Barney employees were encouraged to contribute up to 25% of their pay to purchase shares in Citigroup stock through the Capital Accumulation Plan.[9] Employee funds which were voluntarily used to purchase Citigroup stock were restricted from being sold while they remained in the CAP plan. On June 1, 2009, the day Smith Barney employees (and their restricted stock) were released into the joint venture Morgan Stanley Smith Barney the stock had fallen to $3.71, a 92% discount to the price Weill received from the company.
On March 24, 2009, Citigroup employees who participated in the ailing company's stock purchase plan filed a suit in district court, charging that the financial services firm concealed its exposure to toxic subprime-related and other derivative products. The suit sought class action status.[10]
Philanthropies
Weill served as a Cornell Trustee for many years, and in 1998 he endowed Cornell's medical school, now known as the Weill Cornell Medical College. As chairman of the Board of Overseers of Weill Cornell Medical College and an emeritus member of the Board of Trustees of Cornell University, Weill orchestrated a $400 million donation to Cornell, of which he and his wife personally contributed $250 million.[11] In June 2007, he endowed the Weill Institute for Cell and Molecular Biology at Cornell, housed in a new life science building named Weill Hall.
In May 2003, he received the Baruch Medal for Business and Civic Leadership, presented by Baruch College for his work in public education and his accomplishments in business.
He is currently the chairman of the Board of Trustees of the National Academy Foundation, a non-profit he founded in 1982. NAF supports career-themed academies in the areas of finance, hospitality and tourism, information technology and engineering in over 500 high schools across the United States.
He is also currently the Chairman of the Board of Carnegie Hall and is an avid champion of classical music in the United States. Since 1986, one of the three performance halls in Carnegie Hall has been named after Weill and his wife, Joan and Sanford I. Weill Recital Hall.
In September 2006, Joan and Sanford Weill Hall was dedicated at the University of Michigan. The building is home to the Gerald R. Ford School of Public Policy. Weill donated $5 million towards the construction of the building and an additional $3 million to endow the position of the dean of the school.
Joan and Sanford Weill have been co-chairs, of the annual "Louis Marshall Award Dinner", for most of the past decade (2000–2010).[12]
In 1990, during the period that the Weills were having marital disharmony, Joan suggested to her husband that they escape New York City for the wilderness of the Adirondacks.[13] They purchased a tract of land and built a house close to Knollwood, the former summer home of Louis Marshall and his family overlooking Lower Saranac Lake. The Weills in the meantime returned to marital bliss, Joan endowing a library and student center at Paul Smith's College.[14] [15][16]
In 2010, the Weills bought a 362-acre estate in Sonoma County, California. In March 2011, the Weills announced a $12 million gift to Sonoma State University, providing the funds to complete the Donald and Maureen Green Music Center concert hall for a fall 2012 opening. The facility, inspired by Seiji Ozawa Hall atTanglewood, has been named the Joan and Sanford I. Weill Hall. "We love to be involved in the communities where we spend time," Sandy Weill commented to an interviewer.[17]
In 2012, Weill was elected a member of the American Academy of Arts and Sciences.[18]
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