Interview: Sanford Weill
Financier and Philanthropist

When did you first know you wanted to go into business?

Sanford Weill: When I was a young kid I used to deliver newspapers and I liked the idea of competing and trying to get more new subscriptions than somebody else. And I thought I'd always like some form of business, I didn't know what kind of business I'd go in. I think life is sort of like a competition, whether it's in sports, or it's achieving in school, or it's achieving good relationships with people. And competition is a little bit of what it's all about.

Were there experiences as a kid that had a big effect on you?

Sanford Weill: I was sort of a sissy as a little kid. And when we used to play and fight in the streets in Brooklyn and I would get hurt or something, my mother would always come out and save me. So that sort of postponed the inevitable about getting a good beating, without having somebody to come and save you. So I think that's something that I remember.

I remember the mentoring experiences of some teachers that I had, like a second term home room teacher in public school that really was very helpful to me. And later on, a Latin teacher in high school. I think we are a product of all our experiences.

Talk a little bit about the teachers individually.

Sanford Weill: The teacher I think that really helped me the most was a teacher by the name of Clare Franz, who was a Latin teacher at Peekskill Military Academy where I went to high school, and was also the tennis coach. And it was where I learned how to play tennis and eventually became captain of the tennis team at the school and was on the Junior Davis Cup in New York City. And he sort of helped me through a lot of things in life, what I got in the classroom from how to learn how to think in Latin and be deliberate, to competing, and trying to be a gentleman and do it the right way on the tennis court.

To some people, Latin might seem like a pretty obscure subject, but you seem to have found it rewarding.

Sanford Weill: I think Latin has some logic to it and there was a discipline. I had been doing very poorly in public school. My parents moved back to New York from Florida when I was in the ninth grade. It was right after the war and there was no housing at that time in Brooklyn, and while they were looking for a place they decided to send me away for a year to this military school.

All of a sudden, I went from not doing well in school, to beginning to do better and I stayed there for four years. I think that the experience in the military school -- where at the beginning you learn how to take the punishment before you dish it out -- teaches you a lot about how to get along with people and put yourself in the other person's position. It was a tremendous four years for me.

What other people inspired you in life?

Sanford Weill: As I say, I think I was influenced a lot by my Latin teacher, who was also the tennis coach. That person inspired me a lot. One of the people that I respect the most now, a person I think has done a heck of a lot for this world as a leader, is Margaret Thatcher. She helped create a world that offers us a lot of excitement as we look to the next century.

How do you think she accomplished that?

Sanford Weill: She was a very good ally of Ronald Reagan. I think she was very smart. They stood up to Russia, which finally caused the collapse of the Berlin Wall and the collapse of the communist system. With that came the opening of all of these emerging countries, in Eastern Europe, in Latin America, in Asia. They're all copying our system.

I wonder how many people would have thought at the end of World War II that the capitalist system would be one that was meeting the challenges and making things better for people as we approach the 21st century. We had all these experiments in socialism, and I think it's terrific to see privatizations of all these companies. People are talking about savings, and planning for their future, and retirement. That's what they're doing in Chile and that might be copied in other countries. I think this whole world was set up by what Margaret Thatcher and Ronald Reagan believed in, and stood up and did.

Do you think that's the wave of the future?

Sanford Weill: Yes. I think that the only people that can kill it is ourselves. To be an American and to be in business today, you have the opportunity to influence and continue these changes that are going around the world. I had dinner with President Mubarak of Egypt about a month ago when he was in Washington. It was a tiny, little party, about seven or eight people. And he was talking about downsizing government, and privatizing the companies in this country. They just got an investment-grade rating. I think it's going to continue, and I think it's just great.

What does the American Dream mean to you?

Sanford Weill: I think the American Dream says that anything can happen if you work hard enough at it and are persistent, and have some ability. The sky is the limit to what you can build, and what can happen to you and your family.

You're a good example of the American Dream.

Sanford Weill: I've had a terrific life, from building one company to be the second largest company in the securities industry and merging that into American Express, and becoming president of that company. And not having a similar philosophy and leaving there, and starting all over again about ten and a half years ago. Having an opportunity to build, really from scratch, a company that's now one of the largest financial companies in the world. And at the same time, have an opportunity to do a lot of things that make our society better, and work with young people, and give them an opportunity to see what the American Dream is about. And get to feel better about themselves and teach them that education is the key that unlocks the door to their future.

Were your parents supportive of your dreams of business?

Sanford Weill: I would say that my parents were supportive of me.

My mother really didn't know a heck of a lot about business. She was a very good mother, that made sure we ate right and we had our cod liver oil, but didn't know a heck of a lot about what I did. I remember when we sold our company to American Express, my mother had never had a credit card. So she thought I was still a stockbroker. She really didn't know what that meant.
My father was always very supportive.

What did your father do?

Sanford Weill: My father did a lot of different things. He was in the dress business, and he was in the importing of steel. Then he worked in a store in Miami. For the last 20 years of his life he worked in the Miami office of my company, Shearson. My father liked to work.

It sounds like you got a legacy of hard work.

Sanford Weill: From both my parents, yes. Very hard workers, and they both lived good, long lives. It was terrific.

Did she work as well?

Sanford Weill: No. My mother was a mother.

Were there books that you read when you were growing up that were important to you?

Sanford Weill: Not really. I'm sure that there were, but I couldn't cite anything specifically. I read a lot, but I read about the areas that I'm interested in. You create a knowledge bank in the back of your head. When something happens, something else goes off in your head and says, this is what I should do, because you have this long memory.

As a kid, did you have a sense of being able to negotiate, or being able to make deals? Did you feel different from other kids?

Sanford Weill: No. I don't know that I really ever thought of it that way as a kid.

I got into this business sort of as a fluke. My wife and I were getting married as I graduated from Cornell. And I was in the Air Force ROTC, and I was going to be a pilot, and report down to Lackland Air Force Base in January of 1956 and make $6,000 a year. That was how we were going to start out in life. Then Eisenhower was cutting back on military expenditures, and I was looking for something to do, from June through that January. And in walking around New York and looking for ideas, one day I happened to walk into a brokerage office and it seemed exciting. I had tried to get jobs in that industry when I was at Cornell. And at that point in time, the volume in the New York Stock Exchange was only maybe a million and a half shares a day. Unless you came from a wealthy family, and had good connections, you couldn't get in the business. So I got a job at Bear Stearns and Company, first as a runner, and then worked in the back office. And that's sort of how it all started.

What about the business of being a broker turned you on?

Sanford Weill: What turned me on then, and turns me on even today -- and when the time comes from me to retire from management I think I'd still be interested in it -- is that everything that happens in the world affects the price of securities. So it's the kind of business where you can't wait to get up in the morning and read the papers, or listen to what's on the news, and you know, how the world's going to change. And if you don't like stability, and you do enjoy change, and you look at change as something that creates an opportunity, then I think it's a very, very exciting business.

Obviously, risk is involved.

Sanford Weill: Right. But you know, when you say, "Risk is involved," I think of this:

If a person is not willing to make a mistake, you're never going to do anything right. Because most of us are not perfect, and therefore, I think it's very important to learn how to be a risk taker. Learn how to be a loser, because it's important to be a loser to be a winner. And learn that when you do make a mistake, you'll surface that mistake so you can get it corrected, rather than trying to hide it and bury it, and it becomes a much bigger mistake, and maybe a fatal mistake.

Talk about some of the setbacks you've had along the way.

Sanford Weill: I had started a brokerage company 1960 with three other people. I was pretty young, 26 or 27. Our first year's revenues were about $200,000, that's gross revenues. We paid ourselves about $12,000 a year. We grew that company from 1960 to 1981, to become the second largest company in the securities industry.

I got a little bit tired of doing the same thing, and the world was beginning to change. We asked ourselves, "How can we do something different?" And the idea came, maybe we should merge with American Express, and become part of the corporate establishment. I felt I'd learn a lot of different things doing that. It was a real disappointment to me that it didn't work out, because our entrepreneurial philosophy didn't fit into that kind of culture. We didn't build the kind of company that we could have built together.

But you didn't let that keep you from further ambition.

Sanford Weill: There was a period of a year when I didn't do anything. But you know what?

I think one of the greatest periods in my life is when I decided to leave American Express, because most people don't get to know what people really think about them when they're alive. And you know, you always wonder, "Are people friendly with you -- or people paying attention to you, they make believe they like you -- because of your position and what you can do for them?" And I think what was really great is that when I left I didn't have this position of power at American Express. And the first thing that was important about that was it helped my relationship with my children a lot, because they always looked at me as this person that could never do anything wrong, and therefore they couldn't contribute. And all of a sudden, they saw their father was vulnerable, and it helped create more of an equal kind of relationship with each other, where we respect each other a lot, and that was a very, very important thing that happened.
The second thing was that I found out a lot of people liked me for me, and not because I was the President of American Express, or the Chairman of Shearson. I was able to be very effective in philanthropic things without having a job. People still asked me to go out to lunch, or go out to dinner. It was a great thing to see.

So being unemployed was good for your self-esteem.

Sanford Weill: It turned out that way.

My wife used to call me up and say, "Let's go to a movie." And I said, "What do you mean go to a movie? I'm working." She said, "What do you mean? You don't have a job. What are you working?" I was always afraid the phone might ring, and there might be something that came up, and if I wasn't in the office, I wouldn't be there to hear it.

What contribution that you've made do you feel is the most important?

Sanford Weill: I would prefer other people to talk about if I made a contribution. Things I've done that have really been good have been very diverse. From the business point of view, always encouraging the people in our company to own stock in the company, and if we're going to build something great, to have a lot of people share in the benefits of that greatness. Not just from a pride point of view, but a financial point of view.

A lot of people at Shearson ended up making a lot of money because they had stock or stock options. Their kids were able to go to college, and it changed a lot of people's lives. The same thing has happened here at Travelers Group. Our stock has gone up about 11 times in 10 years and it's owned by 45,000 people. It's been an important thing in increasing the options people have.

We can go from that area to the Academy of Finance Program I helped found in 1980, which is a program to teach young people about a career in the financial services business. It started in one high school in Brooklyn, John Dewey High School, with 30 students. We are now in over 200 schools, in 30 states and the District of Columbia, with about 15,000 students.

Over 90 percent of them go on to some form of higher education. Every one of them get summer internships so they can see that there is something beyond that entry level job. What unlocks that is education. It really changes people's lives. If this country is going to be a leader 50 years from now, we have to get the people of this country to understand the process and to know that they too can achieve a dream. That's a terrific thing that I've been involved in.

I've been involved with Carnegie Hall for the last 13 years, and Chairman for the last six. I feel really good about what we've done growing our educational programs there, building a board that has made Carnegie Hall really a world-class institution. It really represents America in the world of music.

What about this new museum?

Sanford Weill: The people in Baltimore are building a children's museum right near the aquarium. Our company is working with Disney to create a game for children between the ages of maybe four and 12, so we can teach them what the capitalist system is all about. I'm excited about creating this new game. It may be a modern version of Monopoly, although I don't think Monopoly ever gets old. Maryland Public Television is going to have their studio right next to the new museum. I hope we can use that to transmit this game all over the country and reach a broad audience.

You realy believe in giving back to society.

Sanford Weill: I believe in giving back very strongly. I've been so lucky in what's happened to me. I think half the fun is doing things while you're still here. Not just giving back in the form of money, but giving back in your time and ability, so that the money you give also works to make things better. The more we can do to create a better society, that benefits more people, the better chance we have that our society will continue to grow and prosper. It's been great to me, and I hope it's great to my children's grandchildren and great-grandchildren.

You talk about the recapture of Shearson as one of the more exciting things that's happened in your career.

Sanford Weill: American Express was going through changes and they had lots of issues. The new Chairman was Harvey Golub, a person that I had hired to work at American Express. I knew he was a logical person, but you can't fix everything all at once, nobody can, so it made sense for him to get rid of some things. We already owned a company called Smith Barney, and Shearson was a company that I had started. It was terrific, having the opportunity to buy that back.

When we were doing this, I went to 20 or 25 different cities and met all of the brokers. It was a terrific feeling, coming together again with people that I grew up with. We had built one business, and now we had the opportunity to do it again. When we acquired Shearson, that gave us a lot more opportunities for distributing financial products. It encouraged the people at Travelers to want to merge their whole company with us, rather than letting us own just 25 percent of it. I think the most excitement is yet to come.

What do you see happening?

Sanford Weill: Change, globalization of all things in the world. You never want to think the best things are in the past. You want to get yourself to believe that the best things are going to be in the future. You really don't know what that is, we haven't read tomorrow's newspaper. That's the exciting thing about getting up in the morning, thinking about it, strategizing and seeing what may happen.

People say that you're destined to go for another big deal, do you agree with that?

Sanford Weill: We're fortunate that we're in industries that are consolidating. The whole financial industry is consolidating in the United States. And as U.S. companies, we're looking at how we're going to participate around the world.

Our company is very strong financially. It's done very, very well. It's not leveraged in anything we do, so I think we're positioned to do that. We've got to be careful that we don't get too greedy, that, when the right opportunities come along, we're not too busy working on something that's not nearly as important.

I've heard you're a real detail person.

Sanford Weill: Details create the big picture. I'm not as involved in every little thing as I used to be. We have really terrific people in our company, but I've had the luck of starting at the bottom, so I know the pieces that one puts together a business from. It's important to know what you're talking about and not be a big macro person that's flying above everybody's head.

You insist that your executives own stock and take a personal interest in how the company runs.

Sanford Weill: We think that ownership is really key.

Ownership gets people to think like owners, to think that the company is really theirs. Really good ideas and innovative ideas come from the bottoms of organizations -- not really the tops of organizations -- where people are dealing directly with the customers and really understand what the market wants, rather than dictating what the market wants, where people can see the silly things that the chairman may be doing, or whatever, that's wasting a lot of money and there might be a better way to do it.
We encourage people to think that way. The best way to do that is through ownership. If we build something great, like we have at Travelers Group so far, a whole host of people benefit. When our company went public about ten and a half years ago with Commercial Credit here in Baltimore, we paid our directors in stock. Very few companies did that in those years. Today, 14 of our 15 independent directors have over a million dollars worth of stock. I don't think there's another company in America where the directors own so much. So they think about what's really important.

Part of what our top executives get paid every year is in stock, rather than cash. We have an agreement with each other, as well as our directors, that none of us can sell the stock, we can only give it away to charity. So that as long as we're going to be active in the business, we're increasing our ownership and increasing our involvement, rather than decreasing it. We also want to encourage people to do things in their community, therefore we can use some of that appreciation to make charitable contributions.

Now we're broadening it out. Everybody in our company -- all 60,000 people -- will be given stock options, so that we can teach people about saving and planning for their financial future. Most people have found out that Social Security won't do it, and just a plain company pension plan won't do it. You have to plan for yourself. Our system is based on people understanding savings and investment. What is their dream? What do they need to accomplish that? I hope the performance of our company will help the people that work in this company achieve their dreams.

I'm sure it will. Thank you, Mr. Weill.