Weill, Sanford I.
Mar. 16, 1933- Chairman and co-CEO of Citigroup Inc.

1999 Biography from Current Biography

    In a $76 billion stock swap that led analysts and journalists to call Wall Street "Weill Street," Sanford I. Weill, the chairman and CEO of Travelers Group Inc., announced on April 6, 1998 the merger of his financial-services company with the banking and credit-card giant Citicorp. The newly formed company, Citigroup Inc., is now poised to become, in effect, a decathlete of the financial-services industry: a single company through which more than 100 million consumers in 100 countries can buy a home, get financing for a corporate takeover, insure a car, save for retirement, or apply for a credit card, among other transactions. Should the deal steer clear of certain federal laws and Weill and his co-CEO, John Reed, prove capable of managing the sprawling conglomerate, the merger may usher in an era in which, with many other firms forced to consolidate to stay competitive, financial-service behemoths will vie for customers on a global scale.
    Call it "Weillopoly": In the past few years, billion-dollar mergers and acquisitions have become a familiar activity for Weill, whose track record and deal-making abilities are approaching legendary status. Rising from messenger at a brokerage company to co-founder of a brokerage firm to major mover-and-shaker in the financial-services industry through more than 15 acquisitions, Weill became president of American Express in 1983. Many observers thought his career was over after he was unceremoniously forced to resign from American Express two years later. But in labeling him a has-been, they were greatly mistaken. Showing the resilience, brashness, foresightedness, "close-to-the-bone thrift," as Gary Weiss put it in a cover story for Business Week (October 6, 1997), and willingness to take risks that had marked his past achievements, Weill succeeded in assembling yet another financial giant in just under 15 years.
    The son of Polish-Jewish immigrants, Sanford I. Weill was born on March 16, 1933 in the New York City borough of Brooklyn. His mother, Etta (Kalika) Weill, was a homemaker; his father, Max Weill, worked in a series of jobs, including dressmaking, steel importation, and sales. Max Weill spent the last two decades of his life working in the Miami offices of companies his son headed.
    "I was sort of a sissy as a little kid," Sanford Weill admitted during a May 23, 1997 interview for the Hall of Business Web site. "When we used to play and fight in the streets in Brooklyn and I would get hurt or something, my mother would always come out and save me." The Weill family lived for some time in Florida, then returned to Brooklyn when Sandy, as Weill is universally known, was entering ninth grade. Unable to find housing immediately, Weill's parents enrolled him at the Peekskill Military Academy, about 40 miles north of New York City, and he spent all of his high-school years there. "All of a sudden, I went from not doing well in school, to beginning to do better . . .," he told the Hall of Business. "I think the experience in the military school--where at the beginning you learn how to take the punishment before you dish it out--teaches you a lot about how to get along with people." Weill became captain of his school's tennis team and a member of the Junior Davis Cup Team in New York City. He has referred to his tennis coach, who also taught him Latin, as one of his mentors.
    Weill attended Cornell University, in Ithaca, New York. When he earned a B.A. degree, in 1955, he became the first person in his family to graduate from college. A member of the Air Force ROTC at Cornell, Weill wanted to become a military pilot. However, opportunities to do so had shrunk, he has recalled, because the administration of President Dwight D. Eisenhower was cutting back on military spending. So he returned to New York City, where, attracted to the hustle and bustle of Wall Street, he took a job as a messenger for the brokerage firm Bear Stearns, at a salary of $35 a week. (The 1999 equivalent would be about $215.) Before long he worked his way up to being a broker himself. To this day the brokerage business appeals to him, he told the Hall of Business interviewer, because "everything that happens in the world affects the price of securities. So it's the kind of business where you can't wait to get up in the morning and read the papers, or listen to what's on the news, and you know, how the world's going to change. And if you don't like stability, and you do enjoy change, and you look at change as something that creates an opportunity, then I think it's a very, very exciting business."
    In 1960, a mere five years after first entering the financial-services industry, Weill and three of his friends pooled their money (much of it borrowed) and opened their own stock brokerage firm, Carter, Berlind, Potoma, & Weill. "We started out working around the clock," Roger Berlind, now a Broadway producer, told Leslie Eaton for the New York Times (September 25, 1997), adding, "and Sandy's still doing that from everything I hear." By the end of their first year, they earned enough to pay themselves annual salaries of about $12,000 each (about $65,000 in 1999 dollars). Weill became known for aggressively seeking out companies--particularly ones with name recognition--and acquiring them "like a mouse swallowing an elephant," as Leslie Eaton and Laura Holson put it in the New York Times (April 11, 1998). As a result of these moves, along with turnover in partners, Weill's firm underwent many name changes. At one point the company was known colloquially as "Corned Beef with Lettuce," after the first letters of the partners' surnames--Marshall S. Cogan, Berlind, Weill, and Arthur Levitt Jr. (currently, the chairman of the Securities and Exchange Commission). 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 industry's largest firm.
    In 1981 Weill sold Shearson Loeb Rhoades to the credit-card company American Express for about $930 million in stock. (Sources differ on the precise figure.) With that deal, Weill hoped to "go beyond Wall Street to build a great American institution," as he put it to Leslie Eaton and Laura Holson for the New York Times. But the deal turned out to be a major miscalculation for Weill, who 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, in 1984. Increasingly nettled by his forced subservience to the chairman of the company, James D. Robinson 3d, whose ideas about the business conflicted sharply with his, Weill realized that he would never be named CEO. When he resigned, in August 1985, at the age of 52, many industry observers thought that his heyday was over.
    Unemployed for the first time in over 20 years, the ever-optimistic Weill came to see benefits in this low point in his career. "The first thing that was important about that was it helped my relationship with my children a lot, because they always looked at me as this person that could never do anything wrong, and therefore they couldn't contribute," he told the Hall of Business. "And all of a sudden, they saw their father was vulnerable, and it helped create more of an equal kind of relationship with each other, where we respect each other a lot, and that was a very, very important thing that happened. The second thing was that I found out a lot of people liked me for me, and not because I was the president of American Express, or the chairman of Shearson. I was able to be very effective in philanthropic things without having a job."
    Soon enough, Weill made his return to Wall Street. After a failed attempt to buy out BankAmerica Corp., he set his sights a little lower and persuaded Minneapolis-based Control Data Corp. to spin off a troubled subsidiary, Commercial Credit, a consumer loan company. In 1986, with $7 million of his own money invested in the company, Weill took over as CEO of Commercial Credit. He then resumed his old strategy of buying out ailing firms and vigorously slashing costs in the merged company. In 1987 he acquired Gulf Insurance. The next year he paid $1.5 billion for Primerica Corp., the parent company of Smith Barney and the A. L. Williams insurance company, and renamed his expanded corporation Primerica Financial Services. In 1989 he acquired Drexel Burnham Lambert's retail brokerage outlets. Then, 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, in a personal triumph, 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 the 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 the famous investment bank Salomon Brothers Inc.--legendary for the extreme competitiveness of its bond traders--for over $9 billion in stock. Involving businesses ranging from investment services to asset management, life insurance, property and casualty insurance, and consumer lending, the deal thrust Travelers in a league with such companies as Merrill Lynch, Morgan Stanley/Dean Witter, Goldman Sachs, and big financial firms in Europe and Japan. Suggesting that the transaction represented a departure from his previous acquisitions, Weill told Leslie Eaton for the New York Times (September 25, 1997), "The driving force here is not cutting costs. It really is growth, and the entree into markets."
    Travelers Group got even bigger in April 1998, when Weill, along with John Reed, the CEO of Citicorp, announced an agreement to undertake what was then the biggest merger in corporate history. The $76 billion joining of Travelers with Citicorp--the largest supplier of credit cards and the parent company of Citibank, the second-largest bank in the U.S.--dwarfed what had previously been the largest merger, the $37.4 billion union of MCI and WorldCom, announced just five months earlier. The thinking behind the Citicorp merger, which was completed on October 8, 1998, was that by combining a bank and insurance business under one brand, Citigroup would become akin to a financial supermarket, with the capacity to offer customers an unparalleled array of financial services.
    The possibility remains that the merger will run into problems connected with federal law. Ever since the Glass-Steagall Act, passed during the Great Depression of the 1930s, banking and insurance businesses have been kept separate. Weill and Reed are betting that Congress will soon pass legislation overturning those regulations, which Weill and Reed and many other businesspeople consider obsolete. (Many European countries, for instance, have already torn down the firewall between banking and insurance.) During a two-to-five-year grace period allowed by law, Citigroup can conduct business in its merged form; should that period elapse without a change in the law, Citigroup would have to spin off its insurance businesses.
    Many financial observers have speculated that the merger may signal the start of a new era, in which gigantic banks, insurance companies, and brokerage houses combine and compete on a truly global basis. Other banks and financial-service firms contemplating their own mergers are likely to watch carefully whether Reed and Weill manage successfully the merger of the two corporate cultures. In an unusual move, Weill and Reed decided to become co-CEOs of the new company. On July 29, 1999 the Wall Street Journal reported that the two co-CEOs had split their duties: Reed became responsible for Internet technology, human resources, and legal issues, while Weill is managing the company's operating businesses and financial functions. One noteworthy casualty in the company's restructuring was Jamie Dimon, a 15-year associate of Weill's who was once thought to be his likely successor. In November 1998 Dimon was forced to resign.
    A little over a year earlier, Leslie Eaton had reported in the New York Times, "Despite a reputation for ruthlessness, Mr. Weill is well known for his loyalty and surrounds himself with old associates from Shearson and elsewhere." In Time (October 6, 1997, on-line), John Greenwald wrote that Weill "is known to keep reams of business information in his head" and to pay "close attention to detail." Weill and his wife, the former Joan Mosher, who were married on June 20, 1955, live in Greenwich, Connecticut, and have two adult children and four grandchildren. Their son, Marc P. Weill, and daughter, Jessica Weill Bibliowicz, have both worked for their father's company. Marc Weill is the chief executive officer of Travelers Investment Group, Inc. Bibliowicz served as the mutual-fund marketing chief for Smith Barney, Travelers' brokerage unit, from 1994 to 1997. In April 1999 she became president and CEO of National Financial Partners, a start-up firm specializing in financial advice for wealthy people.
    Sanford Weill's philanthropic activities include service since 1983 on the board of Carnegie Hall, in New York City; he was named chairman of that board in 1991. In recognition of the substantial donation he and his wife made toward the renovation of Carnegie Hall, in 1986 the Carnegie Recital Hall was renamed Weill Recital Hall. In 1997 he received the New York State Governor's Arts Award. Weill also helped found the Academy of Finance Program, through which high-school students learn about the financial-services business. He is the principal sponsor of the High School of Economics and Finance, a New York City public high school. In addition, he has been working with the Disney Co. to create, at the children's museum being constructed in Baltimore, Maryland, a game that will teach youngsters about capitalism. In 1998 he and his wife announced that they would commit $100 million to the Cornell University Medical College, in New York City; the school is now known as the Joan and Sanford I. Weill Medical College and Graduate School of Medical Sciences of Cornell University. -- W.G.

References:

Suggested Reading: BusinessWeek (on-line) Oct. 6, 1997; Fortune (on-line) May 25, 1998, with photo; Newsweek p46+ Oct. 6, 1997, with photo; New York Times D p1+ Sep. 25, 1997, with photo, A p1+ Apr. 11, 1998, with photo; Time (on-line) Oct. 6, 1997

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