Free Last Man Standing by Duff Mcdonald

companies. “Wall Street firms were particularly slow to recover given that investor confidence remained shaken,” he wrote, “and before I knew it, I began to see chances for a return to the securities business.” The financial services conglomerate—or megabank concept—in other words, was not Weill’s goal from the get-go. It was merely the result of the man’s relentless opportunism. The company that would eventually become Citigroup was not a philosophical construction designed in a vacuum. It was an evolving organism that began to take shape in the midst of a crisis.
    The first target was the brokerage EF Hutton. During his exile,Weill had walked away from a deal for that firm after news of his interest had sent its stock soaring. Hutton was weakened by the crash, and Weill found its directors keen to discuss a merger. But he was to be denied again. Once word got out that Sandy Weill was on the scene, a bidding war ensued. Weill had offered $21 a share. But Peter Cohen at Shearson carried the day with a $29 bid.
    It wouldn’t take Weill and Dimon too long to identify another target. Their tactical approach was one they replicated again and again. The negotiating team was small, usually made up of Weill, Dimon, their lawyer Kenneth Bialkin, and Arthur Zankel, a board member who was one of Weill’s oldest friends. Weill set the target, and then Dimon went after it and brought it in, identifying areas of promising growth as well as assets that could be sold off to shore up the company’s capital base after a deal.
    One executive who worked at Commercial Credit recalls originally considering the reputations of the two—Weill as the maestro, Dimon as detail man—simplistic. He reconsidered that position, however, when on more than one occasion Weill asked in a meeting, “Jamie, where do we put the decimal point here?” Most colleagues marveled at how smoothly the two-man tag team seemed to work. When it came time to sell units or divisions, Dimon often delegated to John Fowler and Chuck Prince, but in making a buy, it was Dimon from beginning to end.
    One inherent risk of being a serial acquirer was recognizing the threshold when the conglomerate becomes too complicated to manage properly. The objective was not just to sell stock to Wall Street. These companies sold real products to real customers, and if they failed to do that well, the whole thing would come apart at the seams. This is something Weill and Dimon eventually had to face, though not for quite some time.
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    The Commercial Credit crew worked harder over the next decade than most of its members ever had. For Dimon, that would hardly be a difficult mark to set, as it was his first real job. But for many of the others—Bob Lipp, Bob Willumstad, Marge Magner, Mary McDermott,and the like—this was quite literally their second or third career, and they were pulling all-nighters as they hadn’t done since they were youngsters.
    Weill motivated them with equity. But he demanded a commitment in return. Usually, 25 percent of any executive’s compensation was in stock that vested over a three-year period. In what insiders referred to as the “blood oath,” it was understood that no one was to sell those shares even after they’d vested. No one did so until the end of that decade. They were all in it together.
    Dimon later said that despite the drama of all the mergers and acquisitions, it was Weill, not he, who was the deal junkie. “Sandy was always out hunting deals,” he recalls. “But I don’t love them. There’s the systems, the people, the balance sheets, the clashes … they’re very hard.” It’s not surprising that Dimon feels this way, given his inability to let the small stuff slide. Whereas Sandy Weill could easily switch his focus to the next part of his grand vision, Dimon always sweated the details. In that way, his job was much harder than Weill’s.
    Still, Dimon stood out for his drive. “We all worked hard, but