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Sanford Weill: Companies
built 275 days ago
Sanford Weill runs his businesses like an owner. He avoids consultants and gets to know a company by getting to know people at all levels of the business. All of Travelers' employees are encouraged to own stock in the company. Senior managers (who number in the thousands) receive up to 25 percent of their pay in stock, which they are not allowed to sell for two years.
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By the time Weill arrived, Commercial Credit, too, was on the verge of going out of business—not because of legal problems, but because of nose-diving profits and excessive corporate debt. Weill turned things around, introducing an entrepreneurial style that gave branch managers stock options and bonuses for meeting goals. “He has a 100 percent hands-on focus,†Charles Prince, a Weill advisor since his Commercial Credit days, once recalled. “And no detail is too big or too small.†In six years profits rose from $25 million to $193 million. The company grew in leaps. In 1990, Commercial gained $1 billion in receivables by buying the consumer finance arm of Barclays Bank.
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While working at Bear Stearns, Weill was a neighbor of Arthur Carter who was working at Lehman Brothers. In 1956, he 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.
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After the merger, Ted and his wife, Themis, became friendly with Weill and his wife. His son Jamie, who had worked with his father during summers as a young man, wrote a business college thesis paper on the merger of the two companies, which Themis showed to Weill in 1976, prompting Weill to offer Jamie a summer job at the firm. This began a long friendship between the two, with Sanford as mentor to Jamie. The pair worked closely together from the time Jamie graduated from Harvard business school. When Weill’s left American Express, which had bought Shearson Hayden Stone (or rather, a successor company, Shearson Loeb Rhodes), Jamie went with him. The rest of the story is well-known to those who have followed Weill’s career—the acquisitions Commercial Credit, Primerica and Travelers and the eventual merger with Citibank.
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In 1960, Mr. Weill and three partners founded Carter, Berlind, Potoma and Weill, the predecessor of Shearson, Loeb & Rhodes, which was acquired by American Express. From 1965 to 1984, he served as chairman of American Express, a period in which the company completed 15 acquisitions. In 1993, when Travelers Group acquired Shearson Lehman Brothers' retail brokerage and asset management businesses, Mr. Weill was reunited with the firm he had founded.
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By 1988, Weill and his team had turned Commercial Credit around and acquired Primerica Corp., for $1.5 billion, along with its holdings, the brokerage Smith Barney and the A.L. Williams insurance company, which Weill renamed Primerica Financial Services (PFS). The whole conglomerate of brokerage, commercial credit, and insurance operations would continue under the name Primerica Corp.
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