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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
M&A dealmaker's real-life adventure tale tells the story of a turbulent period on Wall Street
Surviving Wall Street: A Tale of Triumph, Tragedy and Timing portrays the dramatic transformation of the investment banking business in recent decades through the tumultuous saga of one firm (Greenhill & Co., a specialist in mergers and acquisitions) and one man (Scott Bok, the longtime CEO of that firm). Written in the style of an adventure tale, this book is also a "coming of age" story for a naive young man who came to Wall Street—as thousands like him do each year—and managed to grab a front-row seat for a period of epic change.
Readers will gain an insider's perspective on:
- A M&A firm's journey from start-up to wildly successful first-of-a-kind IPO and later to a sale to a major global bank
- Numerous crises that rocked Greenhill and all of Wall Street, including the dot-com crash, global financial crisis and pandemic
- How the creation of new firms and mergers or collapses of old ones have driven the evolution and growth of the industry
- The author's role in a battle for control of the University of Pennsylvania that featured activist shareholder and corporate takeover tactics
A firsthand account of deals and dealmakers told from inside the boardroom, Surviving Wall Street will captivate those wanting to understand the dramatic evolution and expansion of Wall Street, as well as younger readers hoping to chart their own path to success in this Darwinian industry.
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Seitenzahl: 851
Veröffentlichungsjahr: 2025
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TABLE OF CONTENTS
COVER
TABLE OF CONTENTS
TITLE PAGE
COPYRIGHT
DEDICATION
PREFACE
CHAPTER ONE: BEFORE THE BEGINNING
CHAPTER TWO: I WANT TO BE A PART OF IT
CHAPTER THREE: UP, UP AND AWAY
CHAPTER FOUR: MOVING FAST
CHAPTER FIVE: A BUBBLE BURSTS
CHAPTER SIX: REFUSING TO SELL OUT
CHAPTER SEVEN: A NOT SO CRAZY IDEA
CHAPTER EIGHT: BRAINS AND BULL MARKETS
CHAPTER NINE: VISITORS FROM JURASSIC PARK
CHAPTER TEN: ANOTHER YEAR OF MAGICAL THINKING
CHAPTER ELEVEN: SHIFTING TIDES AND TIDAL WAVES
CHAPTER TWELVE: GREEDY PEOPLE WATCHING
CHAPTER THIRTEEN: NOT TOO BIG TO FAIL
CHAPTER FOURTEEN: ZAMBONIS AND ICE
CHAPTER FIFTEEN: CLOUDS OF DUST
CHAPTER SIXTEEN: STARTING OVER
CHAPTER SEVENTEEN: SUCCESSION
CHAPTER EIGHTEEN: “WE’RE GONNA DIE”
CHAPTER NINETEEN: NOT DEAD YET
CHAPTER TWENTY: IT’S (NOT ALWAYS) A WONDERFUL LIFE
CHAPTER TWENTY ONE: THERE IS A SEASON
CHAPTER TWENTY TWO: A GATHERING STORM
CHAPTER TWENTY THREE: TWO WORLDS COLLIDE
ACKNOWLEDGEMENTS
NOTES
ABOUT THE AUTHOR
INDEX
END USER LICENSE AGREEMENT
Guide
COVER
TABLE OF CONTENTS
TITLE PAGE
COPYRIGHT
DEDICATION
PREFACE
BEGIN READING
ACKNOWLEDGEMENTS
NOTES
ABOUT THE AUTHOR
INDEX
END USER LICENSE AGREEMENT
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SURVIVING WALL STREET
A TALE OF TRIUMPH, TRAGEDY AND TIMING
SCOTT L. BOK
Copyright © 2025 by Scott L. Bok. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Control Number: 2025901815
Hardback ISBN: 9781394326693
epub ISBN: 9781394326716
ePDF ISBN: 9781394326723
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Author Photo: Courtesy of the author
For Elliot and Jane
PREFACE
The pop artist Andy Warhol is famously associated with the intriguing quip that everyone gets fifteen minutes of fame. Mine came in the autumn of 2023 when I was serving as chairman, a part-time volunteer role, of the board of trustees of the University of Pennsylvania. There I became embroiled in a battle for control of that nearly 300-year-old Ivy League institution. That highly publicized contest marked the start of a period of nationwide campus unrest unlike anything since the Vietnam War protests, drawing intense scrutiny from the media, Wall Street, Congress and the courts.
Having spent a lifetime advising corporations on merger deals, dissident shareholder attacks and assorted boardroom controversies, the nature of that highly publicized contest was familiar to me. The same people–titans of the world of mergers and acquisitions (M&A), private equity and hedge funds–were involved. The same bare-knuckled tactics were utilized. And the same kind of boardroom drama played out.
The only difference was that, at Penn, the stakes were higher than in the typical fight for control of a major corporation. Among the many issues in play were free speech, academic freedom, antisemitism, DEI (diversity, equity and inclusion), “woke-ism” and the role of wealthy Wall Street patrons in the governance of nonprofit institutions.
Ultimately, what I saw at stake was nothing short of the soul of the University–and perhaps by extension the soul of all leading universities.
To understand how this spectacle came to be one must turn the clock all the way back to the beginning of my career. A time when “investment banking”–a field now so prominent that a substantial portion of each graduating class from America’s elite universities applies for an entry-level position–was such a small and obscure activity that a new Wharton graduate like me had no knowledge of it. A time when “private equity”–the now familiar name for the ownership vehicle that began as an offshoot of the M&A business and today controls more than 30,000 companies globally–was, like “hedge fund” and “activist shareholder,” a term yet to be defined. A time when television coverage of Wall Street stocks and corporate deals was limited to a single thirty-minute weekly show on the Public Broadcasting Network, in sharp contrast to today’s full-time business news cable channels Bloomberg, CNBC and Fox Business News.
Wall Street’s scale, profile, wealth and power saw explosive growth in the years that followed, with its reach ultimately extending across the entire corporate landscape and into every other aspect of American life, from politics to culture and even to sports.
But the Wall Street story is not one of unrelenting progress. Crises of various ilk are frequent, such that few firms last long in this Darwinian arena. Most firms in this domain end up either forced out of business or subsumed into a more successful competitor. The names of the departed–each of which first enjoyed an extended period of great fortune–are still familiar: Bear Stearns, Dillon Read, Drexel Burnham, E.F. Hutton, First Boston, Kidder Peabody, Lehman Brothers, Paine Webber, Salomon Brothers and Smith Barney, among many others, along with their British equivalents of Baring Brothers, Cazenove, Kleinwort Benson, Morgan Grenfell and Warburgs.
Life for those who lead these firms is even more precarious. Few Wall Street leaders get to their finish line with reputations fully intact. The overlapping life cycles of Wall Street firms and those who run them drive the evolution, innovation and growth of this ferociously competitive industry.
Here the story of this dynamic and increasingly powerful industry is told through the tumultuous adventure tale of one firm (Greenhill, a pioneering specialist in M&A) and one man (myself, Greenhill’s longtime leader), someone who came to Wall Street four decades ago as an eager but naïve new recruit–as thousands like me now do each year–and managed to grab a front-row seat for a period of epic change.
–S.L.B.
CHAPTER ONEBEFORE THE BEGINNING
You play it the company way.1
– Frank Loesser, How to Succeed in Business Without Really Trying
In a speech of less than one-minute told repeatedly over more than two decades at innumerable client meetings and every office holiday party, Greenhill, the man, would describe the founding of Greenhill the business in a few phrases. He wanted to spend all his time with clients rather than managing people. So he launched a new firm with only “a secretary and driver and Gayle [his wife] hanging pictures in the office.” Then “people started showing up.” Thereafter, as he repeated the story to Dealmaker magazine many years later, “We got lucky. Things just kind of happened.”2
But there is a simplifying myth to the origin story of almost all enterprises. There is some truth to such stories but not the whole truth. Likewise, the story of how Robert Greenhill (the man) became Greenhill & Co. (the business) amid a spectacular albeit tumultuous period of expansion on Wall Street and developed into a global publicly traded enterprise of some renown, is more complicated and interesting. It is perhaps even instructive.
As a starting point, it is critical to recognize that the business that exists in financial capitals around the world but is universally referred to as “Wall Street”, is a hypercompetitive one. Smart, extremely ambitious people are drawn to that business. There is the potential to create a sizable personal fortune, although those ambitious people routinely overestimate the probability of doing so for themselves. To maximize the money generated for participants, leverage in various forms is utilized, elevating risk. That risk is further exacerbated by the need for each firm continually to evolve to address technological innovations, changing government policies, economic cycles, fluctuating markets and new competitors.
Success in this realm is typically short-lived, and failure can be both sudden and brutal.
The combination of aggressive people who are free to withdraw their talents whenever they choose, high leverage, constant change and volatile markets explains why history is littered with stories of even the most highly regarded firms ultimately collapsing into liquidation or falling into the arms of a rival. Relative to the few dozen significant firms in this business today, many more have disappeared or been swallowed up by the survivors. In one way or another, the success of each of the survivors is born from the failure of others.
Competition within Wall Street firms is often every bit as ferocious as the competition among the rival firms. Just as in the case of star athletes, very few senior executives “go out on top.” Even among those few who achieve great success, most end up later failing. Some falter when wrong-footed by a shift in markets or a cleverer competitor. Others are brushed aside by people underneath them who believe they have made a strategic mistake, not kept up with markets, aren’t pushing their firm hard enough or have simply held onto their leadership post too long. And even for those whose careers do not end in quiet failure or public humiliation, there are almost inevitably harsh setbacks along the way from which they must attempt to rebound.
“There are no second acts in American lives,”3Great Gatsby author F. Scott Fitzgerald famously said. That’s not completely true of Wall Street, although successful second acts are very rare indeed. It was Robert “Bob” Greenhill’s attempt at a second act that led to the creation of Greenhill the firm.
His first act played out at the storied Wall Street firm Morgan Stanley, which was carved out of the esteemed J.P. Morgan bank in 1935 in response to the Depression-era Glass-Steagall Act. That law required the separation of investment banking (various activities related to stock and bond markets) from commercial banking (principally the collection of deposits and making of loans). Morgan Stanley, thus, inherited at birth a commanding position in the investment banking business – the smaller but more dynamic of the two businesses that were separated.
From the start it benefited from being a prestigious brand, yet for many years it remained a remarkably small firm. As the firm was approaching its twenty-fifth anniversary, business writer Martin Mayer noted in the revised edition of his book, Wall Street: Men and Money,4 that Morgan Stanley had a single office, fewer than a dozen partners, ninety-five total employees and only $4.5 million in capital.
The firm’s genteel culture was one characterized by integrity, understatement and restraint, rather than the aggressive salesmanship that would come to define Wall Street in the years that followed. Yet its distinguished heritage led it to expect, quite justifiably for many years, to repeatedly win business from America’s leading corporations. Its simple mantra was the phrase J.P. Morgan’s son Jack uttered not long before Morgan Stanley was created in describing his bank’s strategy in Congressional testimony: “…first class business in a first-class way.”5 The belief among Morgan Stanley’s partners and staff was that, if they did business in that manner, new opportunities would continue to flow to the firm, thereby solidifying its preeminent position. And indeed, it was the firm, not the individual banker, that was paramount in the Morgan Stanley ethos.
Bob Greenhill was somewhat of an outlier relative to the historic Morgan Stanley culture – one of several men who sought to drag the firm into a new era characterized by increasingly intense competition. As historian Ron Chernow put it in his weighty volume The House of Morgan, “Greenhill was that Morgan rarity – a partner who emerges as a distinct personality in the public mind.”6
Bob joined Morgan Stanley straight out of Harvard Business School in 1962, having earlier graduated from Yale and served in the US Navy. He came from a modest Midwestern background and was not at all a physically imposing man. But his extraordinary energy, indomitable will and love of competition made him a memorable fellow who stood out from the crowd.
The firm of which Bob became a prominent part remained highly prestigious and discreet to the point of secretiveness, as demonstrated by the fact that even decades later (and unlike the two other firms that descended from the original banking house of J.P. Morgan), it refused to sanction a single interview with Chernow for his definitive history, nor even to answer his written inquiry as to why.7 These characteristics helped secure for Morgan Stanley a position on Wall Street that remained far out of proportion to its size – there still being only thirty-four partners after Bob’s class was promoted in 1970. At that time, the firm’s perceived importance remained such that the election of new general partners merited a story in The New York Times. And so that July Bob and five others, including his Harvard Business School (HBS) classmate and fellow Baker scholar (signifying top 5% of the HBS class) Richard Fisher were profiled in connection with their election to the partnership.8
If the world of investment banking has always been a tumultuous one, then the era in which Bob made partner was no exception. What was at stake was later clarified by the ultimate fates of what Chernow identified as that era’s three leading firms alongside Morgan Stanley: Kuhn Loeb, which later got swallowed up by Lehman Brothers, which in turn later collapsed into bankruptcy, and First Boston and Dillon Read, which were each later acquired by large Swiss banks and ultimately saw their once respected brands disappear.9 The major strategic issue of that day, and for the few decades to follow, was the importance of the traditional investment banking business (which involved raising capital by executing stock and bond sales for major corporations and therefore depended on the number and quality of longstanding firm relationships with blue chip clients) versus the trading business (which required more capital, involved greater risk and was seen as less prestigious, even as it rapidly grew in parallel with increasing capital markets activity).
The rivalry between those two businesses originated from the fact that their respective participants tended to be very different sorts of people. Only rarely did an individual move over the course of their career from one business to the other. Bankers tended to think those on the “sales and trading” side of the business were less educated, not particularly hard working, generated revenue only by using copious quantities of firm capital and were prone to taking risk recklessly. In turn, traders tended to think bankers were overeducated elitists who benefited from their social connections and toiled in a business that was neither as profitable nor as scalable as trading. A banker might be scorned as “a good knife and fork man” – in other words, skilled at dining with clients but not useful for much else. Speaking of entertainment, those on the sales and trading side were more likely to bring clients to a sporting event or strip club, while bankers were more likely to bring clients to an exclusive golf club or London’s Royal Opera House. Thus bankers and traders were two very different animals that did not always coexist peacefully.
Beyond the growth in the relative importance of the trading business, other changes to the historic investment banking business model were also emerging. As a young partner, Bob was put in charge of a newly formed merger advisory group, initially comprising only four people. What merger advisors would do was advise companies on what businesses to buy or sell (the threshold strategic question), when (a market timing question), how (the tactical question, often complicated by competitors seeking the same target), at what price (the valuation question) and how to finance that purchase price. But over time, the best merger advisors would come to play a role that went far beyond those technical functions. They were able to bring two negotiating parties to agreement employing the kind of “shuttle diplomacy” made famous by the American diplomat Henry Kissinger in various Middle East crises.
At the highest level, they exemplified the Yiddish word macher, someone who can make things happen – in other words, a dealmaker.
For many chief executives and their boards of directors, a major acquisition could be the most important decision of their career, and certainly the sale of their company would be that. Yet, while merger advice would turn into a $30 billion annual fee source for Wall Street a few decades later, at that time it was viewed as an innovation simply to charge clients fees at all for such advisory work, rather than treating that as a free service provided to enhance client relationships and thereby garner more stock and bond underwriting assignments.
Stagflation and declining stock markets meant the 1970s were generally a grim period on Wall Street, but the contested and public nature of M&A transactions drew intense press coverage. Both the advisory business and the profile of its principal combatants grew over time. Bob’s colorful and aggressive personality was ideally suited to this new business, which came to thrive in the booming markets of the 1980s, when M&A became a sort of competitive sport for corporations and investors. The more that big deals happened, the more everyone was drawn into the game. As Chernow put it, “Greenhill personified the rock-’em, sock-’em style that would characterize Wall Street in the 1980s.”10
Despite its long history of success, Morgan Stanley began to suffer from the same internal struggles that had long characterized other Wall Street firms. For one, there was a developing tug-of-war between those who wished to remain true to the old Morgan Stanley image as a conservative, client-focused, prestigious but deliberately low-profile firm, and those who felt the need to grow and compete as aggressively as possible to ensure survival and maximize profits in an evolving and increasingly competitive Wall Street. Chernow noted that, by 1983, the latter view was winning, as Morgan Stanley had become “more tense and confrontational than in the old days, full of ambitious overachievers.”11
With several young partners including Bob jostling to lead the business, the firm followed a Wall Street custom of implementing a compromise solution intended to retain all the competing talent until the next generational change in leadership was required. In a nod to the firm’s history that would have been impossible for anyone to object to, the patrician S. Parker Gilbert was named chairman in 1984. Consistent with the firm’s history as an old-fashioned partnership, nobody held the title of chief executive officer (CEO).
For a firm still deeply enamored of its illustrious history, one could not imagine a person better suited to lead than Parker. His father, Seymour Parker Gilbert, was a J.P. Morgan partner, US Treasury executive and lawyer whose premature death in 1938 at only age 45 (when Parker was four) was reported in detail on the front page of The New York Times.12 Parker’s mother then married founding Morgan Stanley name partner Harold Stanley. And to top that off, Parker’s godfather was the other founding name partner, Henry Morgan. However, an impeccable pedigree wasn’t his only qualification for the chairman role. Parker had the understated style and calm demeanor of an elder statesman, even though he was only in his early fifties at the time. He did not dominate a room, nor was he someone who liked to hear himself speak. But like the proverbial E.F. Hutton made famous through memorable advertisements of the day, when he spoke, people listened. He was, therefore, in all respects the leader most likely to provide a bridge between Morgan Stanley’s past and its future, all while holding together the firm’s ambitious senior team.
As the private partnership prepared for its initial public offering (IPO) two years later, it continued its effort to retain all the competing talent by going out of its way to signal that, in fact, it was a four-person management committee who jointly led the firm rather than a single person. Thus, the headline of an obviously engineered New York Times article became “The Four Who Guide Morgan Stanley.”13 The story quoted unnamed “insiders” who said the four “operate[d] on a collegial basis, making important decisions by consensus,” a claim that, if true, would have made Morgan Stanley an exception to industry norms.
Besides Parker, others in that leadership group included Bob Greenhill, now head of the powerful investment banking division (which included the merger advisory group) and his classmate Richard (Dick) Fisher, who had been named president when Parker became chairman. Fisher didn’t have Parker’s aristocratic background – he went to William Penn Charter School near Philadelphia on a scholarship before going to Princeton. An early bout with polio meant he used a cane much of the time. But he had Parker’s diplomatic style and a polish reflective of the old Morgan Stanley. Rounding out the group of four was the cerebral Lewis Bernard, who was invariably referred to within the firm as the smartest of the group and held the dual distinction of being both the youngest person ever named partner and the first Jewish partner.
As common as uncomfortable shared management schemes are on Wall Street, so also is the short tenure of such arrangements. And so, less than 4 years post the firm’s successful IPO, Parker Gilbert retired at the not-so-ripe old age of 56, thereafter devoting his energy to trusteeships with the Morgan Library and Metropolitan Museum of Art, as well as longtime leadership of the exclusive National Golf Links of America in tony Southampton on Long Island. Dick Fisher was named chairman, Bob Greenhill president, and still there was no chief executive. The two men jointly signed the annual report and important internal memoranda, striving to create the image of a dual-headed business, consistent with the manner in which its archrival Goldman Sachs was managed in that period.
This partnership between two former classmates did not prove to be a stable one. Partly to blame was the fact that Dick hailed from the trading side of the firm, which was growing in scale and importance, while Bob came from the investment banking side, the firm’s legacy business. Another factor was that Bob was always laser-focused on doing deals for clients, while Dick was more strategically minded at a time when financial services business models were evolving at great speed. Bob’s focus meant he had little interest in management tasks and was often away visiting clients, while Dick was a natural manager and generally at the headquarters running what was an increasingly complex, large and rapidly growing global business.
Consistent with academic finance theory that diversification can provide a smoother stream of profits and thereby reduce risk and increase valuations, Fisher led the firm to expand geographically, scale up its trading business, increase its use of technology and acquire asset management businesses to provide further diversification. At an offsite conference held in suburban Westchester County for all firm officers (those ranked vice president and above), one of the leading bankers of that day for financial services firms presented the valuation metrics for a wide range of firms in that sector.
At the top of the heap was the huge insurer American International Group (AIG), which was seen as having tremendous scale, a highly diversified business, the most stable earnings and therefore the highest valuation metrics among the numerous financial services firms in the stock market. In presenting this analysis to its senior team the firm led by Fisher tried to reach beyond the obvious peer group to an even greater prize. Never mind that AIG would one day fall into almost full ownership by the US government to avert a feared collapse of the financial system. At that moment, it was in a position to aspire to, and thus helped propel the desire for ever-increased scale and diversity of income streams at Morgan Stanley.
By early 1993, Morgan Stanley had grown to 7,500 people broken into ten divisions, signifying the increased complexity of the business. The uneasy partnership at the top was no longer tenable, and so a New York Times headline in early March read, “Morgan Stanley Changing Its Leadership.”14 John Mack, a former bond salesman who had been named head of a newly formed global operating committee a year earlier, was named president, and Bob Greenhill was pushed into a “senior advisor” position, a nonmanagement role with a meaningless but frequently used Wall Street title, with which he was to focus entirely on working with clients.
Mack was a charismatic and natural leader, yet far from the prototypical Morgan Stanley senior executive of yesteryear. A former college football player at Duke who came from a Lebanese family, Mack exuded the confident swagger and intimidating power of an athlete who played a physical sport, who wasn’t afraid of conflict, in fact perhaps relished it. He had maneuvered skillfully to push aside Bob, who had continued to be regularly on the road with clients and was neither interested in, nor skilled at, office politics.
The Times noted that the management move was “a reminder that Morgan Stanley’s traditional strength as a financial adviser to large corporations ha[d] been heavily supplemented in the last two decades by its securities sales and trading.” A great salesman himself, Mack was well-suited to manage a growing sales and trading business in a bull market, always pushing his team to be more aggressive to win more business.
As always, the firm tried to paper over the conflicts that were readily apparent in the management move. Bob was quoted in the Times story with a statement that, while it must have been difficult to say after being stripped of both title and management responsibility, was as true as any he ever spoke: “My greatest satisfaction has come from hands-on direct involvement with clients.”
Bob Greenhill was well-known for his relentless focus on dealmaking and disdain for all aspects of management. But even the most junior personnel in the firm knew that he was a highly ambitious man still in his prime who would not remain at the firm long with a lame title like “senior advisor.” So it was absolutely no surprise when, a few months later, Bob announced that he was leaving. Nor was it surprising that, to prevent Morgan Stanley from preempting his planned attempt to take key people with him, he waited to make his move until Fisher and Mack were both away from New York, and then refused their request to hold off on the announcement. What was a surprise was that he was becoming chairman and chief executive of Smith Barney, a huge retail brokerage firm owned by the conglomerate Primerica controlled by Sandy Weill, the legendary Brooklyn-born financial services dealmaker who was a longtime client and friend of Bob’s.
Smith Barney employed a vast army of retail brokers focused on servicing the so-called “mass affluent.” It was widely known for its advertising slogan voiced by the British American actor John Houseman: “We make our money the old-fashioned way; we earn it.” Morgan Stanley-style investment banking was a very small part of Smith Barney’s business, and Weill was anxious to change that. Thus the management task Bob took on was far greater than the one he had faced at Morgan Stanley. Moreover, the people he would be managing were largely in a business in which he had no experience.
With a mandate from Sandy Weill and a desire to prove something to Morgan Stanley and to Wall Street generally, Bob set out to build a full-service investment bank. Stories, ultimately proved accurate, quickly emerged of huge pay increases being offered as part of multiyear contracts. In the end, after trying for far more, Bob took about twenty bankers of varying levels from Morgan Stanley. Those he took were typically among the most aggressive of the firm’s bankers – those more in Bob’s mold than that of Dick Fisher and the old Morgan Stanley.
Notwithstanding the energy (and money) expended in launching a new competitor into the investment banking world, the new venture did not prove a success. Few had expected it would. Less than two years into the effort, a Times headline declared that the “Smith Barney unit [was] shaken by infighting.”15 The article explained that Bob’s recruits and the legacy Smith Barney bankers had “split into warring factions.” Of course, the split related to compensation, a topic that always becomes contentious when a difficult year comes, those with contractual guarantees are unharmed and longer-term employees bear the cost of a shrunken bonus pool.
The Times further reported that, because of the conflict, James (Jamie) Dimon, Sandy’s youthful right-hand man and future longtime chief executive of the modern J.P. Morgan, had taken “a more hands-on role at the firm.” Later, early in 1996, a year after the internal conflict had first bubbled into the public domain, Greenhill was replaced as head of Smith Barney by Dimon. As when Bob was demoted at Morgan Stanley, the various parties said what needed to be said to save face and protect reputations. Bob was quoted echoing the statement he had made at that time: “Frankly, dragging around the administrative burdens of running a large firm, I’m not made for that.”16 Sandy sounded a similar note, saying he had reluctantly concluded that Bob “could do what he does best outside the company.” Meanwhile, Dimon was more circumspect, saying “time will tell” whether the investment in Bob and his team was a good one.
As time passed, the assessment of what had transpired became more candid. Later that year in a profile of Dimon, Bloomberg reported that “Dimon’s and Weill’s initial foray into investment banking proved a chaotic and costly embarrassment.”17 Still later, Weill wrote in his autobiography that “[h]iring Bob Greenhill proved more disruptive to our management process than anyone ever imagined.”18
The year following Bob’s departure, Sandy’s financial services conglomerate, by then renamed for its Travelers insurance unit, made another much larger foray into investment banking, this time acquiring the major Wall Street firm Salomon Brothers for $9 billion. And in the year following that, Sandy pulled off another merger – one with banking giant Citicorp. Later that year, further demonstrating the tenuous position of those atop Wall Street firms, Jamie Dimon abruptly resigned as president of the combined business after a falling out with his career-long mentor Sandy.
In the same interview in which Greenhill’s departure from Smith Barney was explained, Bob announced, without fanfare, his second attempt at a successful second act to follow his time at Morgan Stanley. The Wall Street Journal did not cover the story, and The Times and Bloomberg noted it only in passing that, at age 59, he would start a new investment banking boutique, Greenhill & Co., along with one young banker who had followed him from Morgan Stanley to Smith Barney. He said he hoped to recruit ten more bankers to his new firm.19
As Bob was later fond of reminiscing, soon enough people started showing up.
CHAPTER TWOI WANT TO BE A PART OF IT
New York, New York!
It’s a helluva town!1
– Betty Comden and Adolph Green, On the Town
For a few years in the late 1980s, Bob Greenhill and I both worked in Morgan Stanley’s New York headquarters on Sixth Avenue. But to my recollection we never actually met, never even shared an elevator. We were a full generation apart in age, and when I transferred away from that office I was a lowly “associate” while Bob was president of the firm. By the time I returned he was gone. So the fact that, years later, we ended up partnering in his eponymous new venture was far from preordained. Indeed, the fact that I ever found my way to Wall Street at all is surprising.
Throughout my adult life countless people have assumed that I was born to privilege as the son of Harvard University’s long-serving president Derek Bok. We share an unusual Dutch surname, have a common background in the legal profession, each have a connection to the city of Philadelphia and are of the right age differential for him to be my father. That Bok, whom I have never met, came from a publishing family of late nineteenth-century prominence whose titles included Ladies Home Journal and The Saturday Evening Post.2
My family history is considerably less illustrious. On my father’s side, my grandfather Mathys Bok was a Dutch immigrant carpenter who passed through Ellis Island as a 16-year-old along with his numerous siblings in 1926, more than half a century after Derek Bok’s grandfather made that same transatlantic journey. On my mother’s side, my Scotch-Irish grandfather Benjamin Kennedy left Oklahoma with his young family in 1941 and headed north, having missed the Dust Bowl-era migration west a few years earlier that was chronicled in John Steinbeck’s Grapes of Wrath. Both men settled near Grand Rapids, Michigan, then a small but prosperous town known for its many furniture makers and large population of Dutch immigrants and their descendants.
In the late 1950s my father dropped out of high school to take a job with Michigan Bell Telephone as a lineman, a blue-collar job climbing telephone poles that was immortalized first by a 1948 Norman Rockwell painting and again, a couple decades later, by the song Wichita Lineman, a country classic made famous by singer Glen Campbell. He would remain at what everyone then referred to simply as “the telephone company” for 35 years. And he made a similarly youthful decision, and over the six decades to follow would show even greater loyalty, regarding his marriage – meeting and marrying my mother while she was still in high school. I arrived in 1959, when she was only 18.
My upbringing – in Gerald Ford’s Congressional district – was middle class, Midwestern, small town, Republican, Protestant Christian, conservative in every sense, safe and secure, but largely uneventful. To explore the larger world, I read a lot, particularly biographies of political, business and sports heroes. In 1971, my sixth-grade year, my father grabbed the opportunity to make some extra overtime pay by answering Bell Telephone’s call for linemen willing to travel to New York City for several months to help deal with an overwhelming work backlog. He had done similarly many times in the past, typically going off to some Midwestern location that had suffered an ice storm or other natural disaster to help accelerate phone service restoration.
I was able to visit my dad in New York once, for a week. There I tasted my first real pizza, went to the top of the Empire State Building and saw The Rockettes perform at Radio City Music Hall, directly across Sixth Avenue from my current office location in Rockefeller Center. Notwithstanding that it was then a grimy and dangerous place hurtling toward an existential fiscal crisis, I returned home determined that I would one day live in New York.
In my senior year of high school, I pored over Barron’s catalogue of colleges and, sight unseen, chose the Wharton School at the University of Pennsylvania. A business degree from the Ivy League school founded by the pragmatic polymath Benjamin Franklin sounded more practical than the alternatives. In the fall of my freshman year there I made my first return visit to New York City, this time on a university-sponsored bus along with my next-door neighbor from the nearly century-old dormitory known as the Quad. We bought half-price tickets at the TKTS booth in Times Square for the very last row of the highest balcony for the relatively new and widely acclaimed musical A Chorus Line.
While that marked the very inauspicious start to what would in years to come become a passion for theater, at that point my primary passion was writing for the daily campus newspaper. I wrote numerous stories but was ultimately passed over for the editor-in-chief role, which probably saved me from a career in journalism. More immediately, that disappointment created space in my schedule that was partly filled by my appointment as student liaison to the university’s board of trustees, which four decades later I would come to chair. Academically, I focused mostly on a liberal arts degree given my interest in history and political philosophy, doing only the bare minimum needed to get the Wharton diploma that would prove to be a validating credential when I later entered the business world.
Despite my Wharton degree, I did not start out focused on a career in business. For bright children of middle-class Midwestern parents in that era, there were two professional careers to aspire to: doctor or lawyer. “Finance” did not seem like a promising alternative with the Dow Jones Industrial Average below the 1,000 threshold that it had first crossed more than a decade earlier and short-term interest rates at the previously unheard-of level of 20%. When I graduated, I did not even know the definition of “investment banker,” then a small profession seemingly reserved for the offspring of well-connected families in the northeast.
Squeamish at the sight of blood, I saw the law as my path. I did well enough on the standardized admissions test to get into Penn’s Law School, which I began a week after marrying an undergraduate classmate, a Jersey girl in madras shirts and tight jeans who had randomly moved in across the hall in my coed dormitory. A junior year transfer, Roxanne was straight out of Bruce Springsteen country and described herself as a “bit of a hippie,” making for quite a contrast with the straitlaced Brooks Brothers wannabe from the Midwest that I was.
Working my way through law school, I initially aspired to a position at one of the prestigious old “white shoe” New York law firms. I saw myself as a litigator, not really having a sense of what a corporate lawyer actually did. Then one day, as I was starting to think about internships for the summer before my last year of law school, I received in the mail a torn-out magazine article from Jamie Dinan, a Wharton classmate from Worcester, Massachusetts, who five years earlier had accompanied me on my Manhattan bus trip. He was then working as a New York investment banking analyst and would later go on to create a highly successful hedge fund and own a piece of a championship NBA basketball team.
The article was about Marty Lipton and Joe Flom, the two leading lawyers in the field of mergers and acquisitions, commonly referred to as “M&A.” Both were leaders of relatively young, upstart, predominantly Jewish, New York law firms, benefitting from the fact that the city’s older, more prestigious firms had been slow to pursue this new specialty. In the margin Jamie had scrawled, “you should work for one of these guys.”
One of the visiting professors at Penn Law at that time was Harvey Pitt, previously general counsel and later chairman of the Securities and Exchange Commission (SEC). He taught a course on M&A. On the first day of class, he introduced us to the topic: “Some people question whether M&A is good for companies, whether M&A is good for the economy, whether M&A is good for society. For purposes of this course, suffice it to say that M&A is good for lawyers.” It was a humorous opening line, and of course he was right.
Focusing on the two law firm choices Jamie had recommended, I chose Wachtell, Lipton, Rosen & Katz for a summer internship. I had given some thought to remaining in Philadelphia, but the Wachtell recruiting partner informed me that, “if you want to play in the NFL you have to come to New York.” I wanted to play in the legal profession’s version of the National Football League. And I liked the fact that Wachtell was largely focused on only one aspect of law (M&A), perennially the most profitable law firm per partner in America and modest in size. Including my entering first-year class, it would have only 66 lawyers in total, a fraction of the size of Joe Flom’s firm and other leading New York firms.
The combination of small-scale, unrivaled work ethic and a focus on complex, fast-moving and high-profile projects made Wachtell seem like a very special place – a sort of nerdy version of the Navy SEALs unit. A summer characterized by working around the clock, interspersed with lavish meals at the finest restaurants in Manhattan as the firm’s partners wooed my classmates and me, made it feel even more that way. Accordingly, at the end of my internship I eagerly accepted a full-time offer and declared that I would join the litigation group.
Weeks later I was back in Philadelphia for my final year of law school, which I was paying for by spending thirty hours a week at what seemed like a generous $16 per hour, writing litigation briefs at the large local firm Duane Morris & Heckscher. The lawyer I worked for was only a handful of years ahead of me but would later become longtime managing partner of what over time became a 750-lawyer firm. When I told him of my plans he advised a change of course: “I’d do corporate [in other words, M&A] rather than litigation. Then you have the option of later moving to investment banking.” I had never thought of that possibility, but during my summer internship had at least started to figure out what an investment banker was. So based on that advice I quickly called back Wachtell’s recruiting partner and asked if I could switch to the corporate department. The answer was an easy yes. Corporate was the essence of Wachtell Lipton and yet, strangely enough, everyone else in my entering class had chosen ancillary specialties like tax, litigation or antitrust.
I loved my time at Wachtell, working insane hours but finding it exhilarating to play a role in contentious corporate takeover battles that were routinely covered on the front page of The Wall Street Journal. I worked on assignments where we faced off against some of the highest profile “raiders” (or “takeover entrepreneurs,” depending on your philosophical perspective) of that era: Sir James Goldsmith, Carl Icahn and T. Boone Pickens. While the latter two would have careers that extended far longer, Goldsmith in particular dazzled me with his posh British accent, flamboyant style and quick boardroom retort when told by a Wachtell partner that our client, San Francisco-based paper company Crown Zellerbach, was offering him a fair deal: “I don’t want a fair deal; I want a good deal.”
At one point I was assigned a stint working for a partner who had come to Wachtell from the highly prestigious and much-older Cravath, Swaine & Moore firm. He was a rarity in that he was not homegrown. This fellow had a peculiar, somewhat imperious style compared to other Wachtell partners. I could not bear working with him, and ultimately neither could his partners – I heard later that they made an extraordinary move, pushing him out of the firm for authoring a book that was seen as breaching firm confidentiality. So, in the summer of 1986, a booming time for M&A deals, I answered a headhunter’s call and interviewed with Morgan Stanley and Drexel Burnham Lambert. Drexel was a pioneer in “junk bonds” (i.e. those issued by companies of riskier credit quality) and the highflier of the moment, while Morgan Stanley represented the old school Wall Street elite.
Drexel was a true innovator in financial markets, and it produced breathtaking sums of money for its partners. The annual compensation for its most prominent executive, Wharton MBA Michael Milken, was reportedly in the hundreds of millions of dollars. Not surprisingly for a firm generating that kind of money, it was known for its highly aggressive approach to business. In furtherance of that reputation, in May 1986, just as I was finishing my second year at Wachtell, Drexel M&A banker Dennis Levine was arrested on insider trading charges. Shortly thereafter, he pled guilty and agreed to cooperate with the government in uncovering other insider trading culprits. Insider trading was the cardinal sin for those who worked on Wall Street, as it involved using – essentially stealing – a client’s confidential information in relation to a potential corporate deal to make highly profitable, but also highly illegal, personal investments. To a naive young man from small-town Michigan who started out wanting to be a courtroom litigator, the Levine case played out as an exciting real-life crime drama.
Later that summer I found myself working in the wee hours of a morning at one of the financial printers based downtown, as young lawyers in that day did, to finalize transaction documents. Back in the pre-email era someone had to fly to Washington and hand deliver such papers to the SEC. As dawn approached there was one last item for which we needed a sign off from the partner in charge, Ilan Reich. Ilan was a brilliant but quirky thirtysomething M&A wizard – I once walked into his office to find him gluing together dozens of the small Lucite “deal toys” that we routinely received as mementoes of completed transactions. He was creating a bizarre sort of sculpture for his office.
The junior lawyer group down at the printer called Ilan’s office throughout the morning hours, only to be repeatedly told by his assistant that he was unavailable. It seemed inconceivable that Ilan would be so busy that he could not give us the critical final approval required for us to send our client’s document to Washington in time for a filing deadline. We finally pressed the assistant as to whom Ilan was meeting with, seeking some clue as to what the source of the hold up was. She finally provided the names of several Wachtell litigation partners who had one thing in common: they had each worked as federal prosecutors before joining the firm.
Turned out Ilan was being grilled by his partners. He was part of Levine’s network and would soon be arrested and ultimately sent to prison. Having never known anyone who was arrested for a misdemeanor, let alone sent to prison for a felony, I was flabbergasted. This whole episode thus served as an early reminder to not be too single-minded in my pursuit of Wall Street fame and fortune.
As I pondered my career options, that August I went on a weekend trip with Roxanne to the New Jersey shore near where her parents lived. On the way to Island Beach State Park we stopped to pick up Sunday’s New York Times, as was our custom. As if to help me make my decision, the cover story of the Sunday Times Magazine was titled, “Leaving the Law for Wall Street; The Faster Track.”3 Much as the story validated the decision I was about to make, I worried that it would make me look like an opportunist following a hot trend rather than someone making a thoughtful career decision. I also worried that the story might flush out other talented young lawyers aspiring to be bankers, creating more competition for limited available slots.
I was able to proceed nonetheless. I chose Morgan Stanley on the advice of wise friends, and nine weeks after that magazine article was published walked into the firm’s headquarters in the Exxon Building on Sixth Avenue (right across Fiftieth Street from my current office) as a new associate.
Being a rare Wharton graduate who never took a single corporate finance course, I spent my two weeks between jobs having a friend teach me how to use Lotus 1-2-3 (the primary software used for financial modeling those days) and reading cover to cover the relevant introductory textbook of that era, Principles of Corporate Finance.4
My choice of Morgan Stanley, which in an initial public offering earlier that year had transitioned from a private firm to a publicly traded company, was fortuitous. Less than four weeks after my move, the Levine insider trading case further expanded when Ivan Boesky, a prominent but controversial merger arbitrageur (i.e. he specialized in investing in corporate takeover targets), was arrested and agreed to pay a $100 million fine. The case later expanded even further to implicate others, including the head of Drexel’s M&A group. This growing scandal was one in a series of events that culminated in the bankruptcy and disappearance of Drexel less than four years later.
This chain of events was my first indication that General George Patton’s famous dictum borrowed from ancient Rome that “all glory is fleeting” certainly applied to Wall Street.
Although I had not even known what an investment banker was when I graduated from Wharton five years earlier, by the time I became one the profession had risen to a remarkable place of prominence in the public imagination. In my last year as a lawyer I read with great interest the lengthy Sunday Times Magazine excerpt from Ken Auletta’s Greed and Glory on Wall Street5 – the gripping tale of the power struggle at the top of Lehman Brothers. And in the early days of my investment banking career Tom Wolfe’s epic novel The Bonfire of the Vanities and Oliver Stone’s equally seminal film Wall Street – both cautionary tales, albeit riveting ones – found broad audiences. At the same time Michael Lewis was working on the trading floor at Salomon Brothers gathering material for Liar’s Poker, his entertaining tale of the “Big Swinging Dicks”6 of Wall Street trading floors.
I ended up spending ten years at Morgan Stanley. For about half of that I was based in London, and on top of my making as many as 150 flights a year across the English Channel to visit various clients Roxanne and I managed to find time for at least a weekend visit to nearly every interesting European destination while also accumulating a huge pile of playbills from the numerous West End plays and musicals we enjoyed.
From my expatriate perch in London, I watched the power struggle at the top of Morgan Stanley play out. It had been clear to me for some time that there was a war being waged between investment banking and trading – between the old Morgan Stanley and the new – between Bob Greenhill and John Mack. But even though I sat in the part of the firm overseen by Greenhill, I didn’t feel like I had a dog in what was a fight between two men whom I did not really know. From across the ocean and far down the organization chart, they both seemed impressive to me; Bob for his dealmaking skills and Mack for his inspirational leadership.
While Greenhill was most at home in a CEO’s office or intimate boardroom setting and disliked speechmaking, Mack reveled in such opportunities. I once watched him speak at a firm offsite gathering, following comments from Lord (Gordon) Richardson, the elderly and distinguished former head of the Bank of England and then sort of an honorary chair of the firm’s international business. As Mack finished to a raucous round of applause I enthusiastically exclaimed to the fellow vice president next to me, “That was like watching Winston Churchill followed by Bear Bryant!”, referring to the revered University of Alabama football coach of my youth.
Two years after Mack was handed Greenhill’s president title Roxanne and I returned to New York with our six-week-old baby boy Elliot in tow. Months later, at the age of 36, I was promoted to managing director (“MD” for short), the corporate equivalent of the former partner title. There were vestiges of the elite old private partnership that remained in what was now a public firm, and I certainly found that appealing. The dinner to welcome new MDs was held at the legendary financier Pierpont Morgan’s elegant library, now a museum in midtown Manhattan, and Roxanne and I got to sit at Mack’s table.
I had come a long way from Grand Rapids.
However, things at Morgan Stanley were changing fast. While the firm was still relatively small when I joined, by the late 1980s it added around 1,000 new people annually as it aggressively pushed into new businesses. One of my mentors, a fellow reminiscent of the grumpy but wise old broker that Hal Holbrook played in Oliver Stone’s movie, remarked that investment banking, once the entirety of the firm, had become “the hood ornament on the Mercedes.” The large and lucrative – but riskier – trading business was the engine. In an even more colorful metaphor, he said investment banking was the hot dog stand in front of the casino. “No matter how good your hot dogs are, no matter how many hot dogs you sell, all that counts is what kind of day the boys in the casino [in other words, the trading floor] are having,” he would say.
