Salomon Brothers

"“When I was in my upper twenties, the managing partner of O’Connor said, ‘David, we want to make you the global head of the fixed income and derivatives division of the bank,’ ” Solo recalled. “And I remember saying, ‘... that’s great, but don’t you think you’d be better off hiring somebody from Salomon Brothers who actually knows all this stuff?’ And [he] said, ‘You know what, we might actually lose nine months or a year by not hiring the guy who has more experience, but in the end, we’ve always succeeded by betting on the people who we think have the talent and work ethic—and who we know.’"

"At that 1982 session, Joseph and the others drew up a list of the people who were the stars of the M& A world. It included Martin Siegel of Kidder, Peabody; Eric Gleacher of Lehman Brothers; Bruce Wasserstein of First Boston; Felix Rohatyn of Lazard Frères; Ira Harris of Salomon Brothers—and lawyers too, like Martin Lipton of Wachtell, Lipton, Rosen and Katz, and Joe Flom of Skadden, Arps, Meagher, Slate and Flom."

"What Drexel had done was to securitize the low-grade corporate loan, much as Salomon Brothers had securitized mortgages in its creation of the mortgage-backed security."

"At that 1982 session, Joseph and the others drew up a list of the people who were the stars of the M&A world. It included Martin Siegel of Kidder, Peabody; Eric Gleacher of Lehman Brothers; Bruce Wasserstein of First Boston; Felix Rohatyn of Lazard Frères; Ira Harris of Salomon Brothers—and lawyers too, like Martin Lipton of Wachtell, Lipton, Rosen and Katz, and Joe Flom of Skadden, Arps, Meagher, Slate and Flom."

"What Drexel had done was to securitize the low-grade corporate loan, much as Salomon Brothers had securitized mortgages in its creation of the mortgage-backed security."

"“When I was in my upper twenties, the managing partner of O’Connor said, ‘David, we want to make you the global head of the fixed income and derivatives division of the bank,’ ” Solo recalled. “And I remember saying, ‘… that’s great, but don’t you think you’d be better off hiring somebody from Salomon Brothers who actually knows all this stuff?’ And [he] said, ‘You know what, we might actually lose nine months or a year by not hiring the guy who has more experience, but in the end, we’ve always succeeded by betting on the people who we think have the talent and work ethic—and who we know.’ ”"

"No one could understand why anyone in his right mind would give up a $125,000-a-year job at a comfortable and respected firm like Weeden to take a $50,000 position—with the promise of “consideration of partnership,” but no guarantees—at a house like Salomon Brothers, a big leaguer in general but a minor player in my specialty, municipal bonds. But then, some people just don’t understand risk."

"Our futures, as well as the success of the firm, were intertwined. Billy Salomon had wisely structured a unique compensation system. Salaries were actually quite low,4 but at the end of the year Salomon Brothers would distribute bonuses, based on how the firm as a whole had performed. However, we could draw only 5 percent of our capital, which meant the bonus money was invested with the firm. Consequently, the fate of the partners was directly linked to the success of Salomon Brothers, which fostered a clannish connection within that boiling cauldron of activity. It was understood that apart from our homes, insurance policies, and bank accounts, we didn’t have interests separate from the firm’s and we didn’t make investments outside the firm. All for one, one for all."

"At NYU’s School of Commerce, Larry Tisch met and studied under the legendary Marcus Nadler, whose ideas about the international money markets and the role of central banks would later influence Tisch and a group of devoted followers. Perhaps the most famous member of the group was investor Henry Kaufman, who spent 26 years at Salomon Brothers. “Nadler had an extraordinary ability to simplify complex financial practices,” said Kaufman, who studied under Nadler several years after Tisch. “He did not have a pet theory, but he was an anti-inflationist.” Perhaps Nadler’s greatest quality was his step-by-step approach to problem solving, a hallmark of Tisch’s future business strategy. Nadler developed an enormous following of former students. His classes on current economic and financial problems frequently were attended by former students, many of whom joined the Money Marke- teers, a group that met several times a year for dinner and to hear Nadler speak. Nadler was a major influence in formulating Tisch’s views on money supply fluctuations and the implications for inflation, interest rates, and the economy."