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John Gutfreund

From Alfawiki
John Gutfreund
Born (1929-09-14) 14 September 1929 (age 97)
Scarsdale, New York, U.S.
Died9 March 2016(2016-03-09) (aged 86)
Occupation(s)Financier, entrepreneur, investor
Known forCEO of Salomon Brothers

John Halle Gutfreund[1] (September 14, 1929 – March 9, 2016) was a prominent American financier, entrepreneur, and investor. As the chief executive officer of Salomon Brothers Inc., he played a pivotal role in converting the investment bank into a publicly traded entity, setting a precedent for other Wall Street firms to follow. Throughout the 1980s, his leadership elevated Salomon Brothers to significant acclaim. In 1985, Business Week referred to him as the "King of Wall Street".[2]

Early life and education

Raised in a Jewish household in Scarsdale, New York, Gutfreund was the son of Manuel Gutfreund, who owned a prosperous trucking business. He attended the Lawrenceville School and later earned an English degree from Oberlin College in 1951.[3] After briefly contemplating a career in literature education, he enlisted in the Army and completed his service by 1953.

His father held membership at the Century Country Club in Purchase, New York, where Gutfreund frequently played golf alongside William "Billy" Salomon, son of Percy Salomon, one of Salomon Brothers’ founders.

Career

At the invitation of Billy Salomon, Gutfreund began his career at Salomon Brothers as a trainee within the statistical department. Within months, he transitioned to a clerk role in municipal bonds before rapidly advancing to trader and achieving full partnership by age thirty-four.

In 1978, Billy Salomon appointed Gutfreund as head of the firm, making him the highest compensated executive on Wall Street at that time. While maintaining an office on the 43rd floor of 1 New York Plaza, Gutfreund frequently engaged directly on the fixed income trading floor—the 41st floor’s 'Room'—offering guidance to individual traders.

In early 1991, during his tenure as CEO, Salomon Brothers became embroiled in a Treasury bond trading scandal. Paul Mozer, who led the Government Bond desk, placed bids surpassing Treasury-imposed limits. Upon discovery, Gutfreund delayed suspending Mozer. This controversy jeopardized the firm’s Primary Dealer designation and its standing within U.S. government and mortgage bond markets.

Warren Buffett, whose Berkshire Hathaway owned $700 million in preferred shares of Salomon Brothers, stepped in to safeguard his investment and temporarily assumed the CEO position. Following these events, Gutfreund and other top executives resigned in 1991.

Beginning January 2002, Gutfreund took on roles as senior managing director and executive committee member at investment bank C.E. Unterberg, Towbin. Additionally, he led Gutfreund & Company, a financial consulting firm based in New York that provided advisory services to corporations and financial institutions throughout the United States, Europe, and Asia.

Legacy

Gutfreund is prominently depicted in Michael Lewis’s 1989 book Liar's Poker, which chronicles his time at Salomon Brothers. Lewis later quoted Gutfreund as saying, "Your fucking book destroyed my career, and it made yours."

He received recognition from the UJA-Federation of New York for his philanthropic efforts.

Personal life

Gutfreund was married twice:

  • In 1958, he married Joyce Low, whose father Teddy Low was a partner at Bear Stearns. They had three sons: Nick (born 1959), Josh (born 1961), and Owen (born 1963).
  • In 1981, he wed Susan Penn (née Kaposta), daughter of a Hungarian American US Air Force pilot and a mother of Spanish American descent. They had one son named John Peter (born 1985).

Gutfreund passed away on March 9, 2016, at age eighty-six.

External links

  1. ↑ pronounced "goodfriend"
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named nyt
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named :0
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