Richard S. Fuld, Jr.

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Richard Fuld speaking at the World Resources Institute Forum, January 2007

Richard "Dick" Severin Fuld, Jr. (born April 26, 1946 in New York City ) is an American bank manager and was the last chairman and chief executive officer of the investment bank Lehman Brothers . He held his position from 1994 with Joseph M. Gregory as deputy until the company's bankruptcy in 2008.

Origin and education

Fuld was born the son of Jewish descent to his father of the same name and mother Elizabeth Schwab (* 1919) in New York City. He is the great cousin of Oakland Athletics ' outfielder Sam Fuld. Fuld graduated from the University of Colorado at Boulder in 1969 . He received his MBA from New York University ’s Stern School of Business in 1973 . Fuld's first career as a United States Air Force pilot ended abruptly because of a fist fight with his superior. He himself commented that he had "defended a young cadet" who was humiliated by the officer.

Career

Started at Lehman Brothers

In 1969, Fuld joined Lehman Brothers as a securities dealer and quickly became well known within the company for his good work in fixed income . At the age of 37, Fuld was promoted to supervisor in the “Fixed Income” and “ Equity ” departments. Its main role was to oversee all trading operations of the bank. The US-American author and journalist Ken Auletta stated that Fuld was “an extremely successful trader” and that his “skills as a manager [however] were unsatisfactory” : “His interaction with colleagues [was] always dedicated” , so Auletta. "And when [Fuld] talked, everything was very monotonous . " Auletta went on to say that precisely because Fuld was such a gifted trader - especially before the computer - "[the bank manager] [began] to digitize himself and was no longer a human being" . In the early 1980s, Fuld controlled 22 managers from core areas of the bank and was responsible for two-thirds of 1982 profits.

Manager and boss of the bank

After Shearson and Lehman Brothers had been split, Fuld was shared with James Tomilson Hill on the dual leadership of the bank. Fuld promoted a friend and internally controversial employee, Thomas Christopher Pettit , to the management of Lehman Brothers. After the American Express money house was dissolved, an internal crisis broke out in the bank and in its top management. Fuld's "Fixed Income" division was the only core area of ​​revenue for the bank. In April 1994, Fuld was named chairman of the bank, replacing almost all of the team around him. So he also downgraded Pettit, who could no longer convince Fuld with his tactics and previously acted as president of the money house. A few months after his downgrade in April 1996, Pettit was killed in a snowmobile accident. Since the friendship between Fuld and Pettit had broken before the accident, Fuld refused to speak about it in public. Under Fuld's leadership, Lehman Brothers returned 14 percent equity - 11 percent more than in 1995. Finance professor Roy C. Smith of New York University's Stern School of Business called Lehman Brothers "a cat with 19 lives . " Smith compared the financial institution to an accordion : "[...] you can squeeze when you want. [...] You are incredibly flexible. That is also due to Richard Fuld ” .

As chairman of the board, Fuld renewed the bank's management and employees in the three new core areas: "investment banking", "equity" and "fixed income". Most of the money house under Fuld's direction focused on investment banking with high leeway and high income, which he himself called "high-margin businesses". To ensure maximum profits, Fuld hired the most expensive traders and experts. In January 1997, the bank generated $ 48.4 million . Fuld provided $ 46 million of this to pay upper management and left only $ 2 million for Lehman Brothers lower-level employees. During the terrorist attacks on September 11, 2001 , the bank lost its offices in the World Trade Center , just as Fuld's investment banking concept was making huge profits. In an interview with Business Week , Fuld praised the fact that Lehman Brothers was only able to cope with this crisis thanks to the great staff. That same year, Fuld received approximately $ 105 million in compensation, earning him fourth place on the 2001 list of highest paid chief executive officers.

Fuld continued to gain reputation due to his strong personality as a bank manager. In 2004, he implemented an internal agreement that stipulated, among other things, how the company's employees should be remunerated. Now his motto was “remuneration equals income”. Fuld also changed the relationship between wages in cash and shares . In 1994, four percent of Lehman Brothers was owned by employees. Ten years later the percentage rose to 35. A year earlier, Fuld was responsible for the takeover of Neuberger Berman : “Neuberger Berman is one of the largest and most renowned independent asset managers. If Neuberger cooperates with our wealth management , Lehman Brothers will become a market leader for a very desirable trading place. ”Due to his enormous success, Fuld hired his new employees with the sentence:“ If you come to us, we will make you rich - maybe very rich ” . Almost all millionaires now worked for Lehman Brothers.

Bankruptcy of the house

In 2007, Fuld, who self-deprecated his nickname “ Gorilla ” through humor (“I'm the only banker whose arms reach the floor”) and a stuffed gorilla in his office, reportedly made $ 45 million, his earnings in the years 1993 to 2007 are estimated to total up to $ 500 million. During his entire tenure at Lehman Brothers, Fuld is said to have received $ 1 billion in compensation. Similar to the case of Barings Bank , the corporate profits on which the compensation is based were increased through excessive leveraging . Lehman Brothers, under Fuld's leadership, was charged with lending $ 35 for every US dollar of equity. In connection with the massive drop in prices for American real estate, this resulted in many bad loans in 2008 . After the US government had supported three large banks ( Bear Stearns , Fannie Mae and Freddie Mac ) with billions of dollars, political pressure not to absorb more banks had grown so great that the then US Treasury Secretary Henry Paulson asked for the The UK Barclays Bank's refusal to acquire a stake in Lehman Brothers did not provide any further support, which - contrary to the previous principle of Too Big to Fail - led to Lehman Brothers insolvency. A few days after the bankruptcy, only 170 employees were working for Lehman Brothers, 24,988 had been terminated. At the time of bankruptcy, Fuld held 10.9 million Lehman shares, which are said to have been valued at $ 1 billion.

Matrix Private Capital Group

In 2009, Fuld started his own consulting firm called Matrix Private Capital Group. Only ten people reportedly work for the company. The main tasks of Matrix include advising private and business customers on the current economic situation, investments, strategies and risk management. According to his own account, Fuld started the new company because he loves to start new organizations. Critics refer to the company as well as its employees and businesses disparagingly as " Pennystock " and highly speculative.

Private

The bank manager is married to Kathleen Fuld and has three children with her, Chrissie, Jacqueline and Richie. His estimated income throughout his tenure at Lehman Brothers is approximately $ 1 billion. During the public hearings, Fuld protested that at the time of the Lehman Brothers bankruptcy he had lost eight million shares valued at $ 800 million and advised MPs that he had made just under $ 250 million. On November 10, 2008, he signed his property on Jupiter Island off Florida to his wife for 100 US dollars. The purchase price for the property was previously $ 13.75 million. The top manager also owns a property in Greenwich that is said to be valued at 10.8 million US dollars. Fuld tried a buyer for his holiday home in Sun Valley , which has a total value of 27 million US dollars to find and sold previously his penthouse on Park Avenue for 26 million US dollars. Fuld also owns an art collection with his wife valued at $ 20 million.

Memberships

Due to Lehman Brothers' enormous profit increases, which in retrospect were associated with incalculable increases in risk, Fuld became a member, partly on a voluntary basis, in numerous institutions. Before Lehman Brothers announced bankruptcy, Fuld served on the board of directors of the Federal Reserve Bank of New York for some time . After the financial institution closed, Fuld stepped down from the board of directors of the Robin Hood Foundation . Furthermore, Fuld was a member of the Board of Trustees at the New York Presbyterian Hospital , a member of the World Economic Forum and the Business Council.

Movie and TV

In 2009, Fuld was portrayed by Corey Johnson in the BBC film " The Last Days of Lehman Brothers " . In the same year the BBC aired a documentary about the bank's case. Main focus was also on Fuld, his business practices and biography. A year later, the bank manager appeared in the Oscar- winning documentary Inside Job . Also in 2010, the Arab news channel Al Jazeera broadcast the educational program Meltdown: The Men Who Crashed The World . In the film, Fuld is described as "the cruel Wall Street robber". In 2011, Fuld was portrayed by James Woods for the HBO release Too Big to Fail . In the same year the film The Big Crash - Margin Call was released . The character "John Tuld" is based on Fuld and was played by Jeremy Irons .

Awards

  • In 2004, the bank manager ranked fourth on the list of top earning chief executive officers with a salary of $ 105 million.
  • In 2006, Institutional Investor Magazine named Fuld its senior US chief executive. In the list of the worst American directors of all time, Condé Nast Portfolio ranked him first, noting that Fuld remained “belligerent [and] unrepentant” even after the Lehman Brothers bankruptcy: “Even Bernard L. Madoff has apologizes " .
  • After the 2008 financial crisis , Time Magazine included him in the list of the 25 people most responsible for the crisis. The US television station CNN positioned Fuld in ninth place of the ten most wanted culprits of the financial crisis ("Ten Most Wanted: Culprits of the Collapse"). In December 2008, Fuld received the "Lex Overpaid CEO" from the Financial Times for his "socially judged excessive income" in 2006 and 2007 - two years before Lehman Brothers filed for bankruptcy.

literature

  • Mark Stein: When Does Narcissistic Leadership Become Problematic? Dick Fuld at Lehman Brothers. In: Journal of Management Inquiry (2013, online ).

Web links

Wikiquote: Richard S. Fuld, Jr.  - Quotes

Individual evidence

  1. ↑ a b Gorillas Game. The story of a mistake of the century - because the New York investment bank Lehman Brothers went bankrupt, the world cannot find its way back to normal . Der Spiegel , March 9, 2009, p. 40 ff .
  2. ↑ Richard S. Fuld, Jr. NNDB, accessed May 31, 2015 .
  3. ↑ Marc Topkin: Tampa Bay Rays news and notes. (No longer available online.) Tampa Bay Times, February 11, 2011, archived from the original on May 31, 2015 ; accessed on May 31, 2015 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.tampabay.com
  4. ↑ Peter Robison, Yalman Onaran: Fuld's Subprime Bets Fueled Profit, Undermined Lehman. Bloomberg , September 15, 2008, accessed June 1, 2015 .
  5. ↑ a b c Fuld’s Air Force career came to abrupt end after he got into fist fight with commanding officer. The Times , September 16, 2008, accessed May 31, 2015 .
  6. ↑ a b c d e Tim Halpern: From the trading floor to the executive suite. Reference for Business, accessed May 31, 2015 .
  7. ↑ Peter Truell: Christopher Pettit Dies at 51 - Ex-President of Lehman Bros. New York Times, February 19, 1997, accessed June 21, 2015 .
  8. ^ Nicholas D. Kristof : $ 17,000 an hour. No success required. Herald Tribune , September 18, 2008, accessed June 1, 2015 .
  9. ↑ a b c Charlie Gasparino: Fuld: Please don't ask me about Lehman. Fox News Channel , May 28, 2015, accessed June 1, 2015 .
  10. ↑ David Gelles: Breaking Silence, Richard Fuld Speaks on Love, Putin and 'Rocky'. New York Times , May 28, 2015, accessed June 1, 2015 .
  11. ↑ Justin Baer: In Lehman's Shadow, Ex-CEO Fuld Carries On, Quietly. Wall Street Journal , September 15, 2013, accessed June 1, 2015 .
  12. ↑ Dick Fuld: Lehman Employes Owned 30% of Stock. Bloomberg, May 28, 2015, accessed June 1, 2015 .
  13. ↑ The Return of Lehman Brothers' Dick Fuld. Bloomberg, May 28, 2015, accessed June 1, 2015 .
  14. ^ A b Nancy Pelosi: Waxman: I have a basic question for you. Is this fair? October 6, 2008, accessed June 6, 2015 .
  15. ^ Adegoke Yinka: Lehman's Fuld sold Florida mansion to wife for $ 100. Reuters , January 26, 2009, accessed June 6, 2015 .
  16. ↑ Hilary Lewis: Dick Fuld's Greenwich Bunker. (No longer available online.) Business Insider on September 26, 2008, archived from the original on June 21, 2015 ; Retrieved June 6, 2015 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.businessinsider.com
  17. ↑ Alexandra Klausner: Disgraced Lehman Brothers boss who presided over biggest bankruptcy in American history. Daily Mail, June 2, 2015, accessed June 6, 2015 .
  18. ↑ Marc Pitzke: Broken US investment bank: What happened to Lehman Brothers? Spiegel, accessed June 6, 2015 .
  19. ^ Lehman Chief: Subprime's End-Near; Pain-Not Over. Forbes Magazine , April 16, 2008, accessed June 9, 2015 .
  20. ^ The Last Days of Lehman Brothers. BBC, accessed June 2, 2015 .
  21. ↑ The Fall of Lehman Brothers. BBC, 2009, accessed June 2, 2015 .
  22. ^ Roger Ebert: Inside Job. Chicago Sun-Times , October 3, 2010, accessed June 2, 2015 .
  23. ^ Meltdown: The Men Who Crashed the World. 2010, accessed June 2, 2015 .
  24. ↑ HBO: Too Big to Fail: Cast & Crew. HBO, accessed June 2, 2015 .
  25. ^ 'Margin Call': A Financial-Crisis Film That's on the Money. The Atlantic Times , accessed June 2, 2015 .
  26. ^ Portfolio's Worst American CEOs of All Time. CNBC , accessed June 12, 2015 .
  27. ^ Dick Fuld - 25 People to Blame for the Financial Crisis. Time Magazine, accessed June 12, 2015 .
  28. ↑ Anderson Cooper : Culprits of the Collapse - # 9 Richard Fuld. CNN, October 10, 2008, accessed June 12, 2015 .
  29. ↑ Overpaid CEO award. Financial Times, December 21, 2008, accessed June 12, 2015 .
personal data
SURNAME Fuld, Richard S., Jr.
ALTERNATIVE NAMES Fuld, Richard Severin Jr .; Fuld, Dick
BRIEF DESCRIPTION American bank manager and chairman of the investment bank Lehman Brothers
DATE OF BIRTH April 26, 1946
PLACE OF BIRTH New York City