Tuesday, March 15, 2016

John Gutfreund’s coup d'état

Enjoying the view along the Lake in Central Park. 11:00 AM. Photo: JH.
Wednesday, March 16, 2016. Slightly chilly, sometimes sunny day in the mid-50s yesterday in New York.

Last Monday afternoon at 5:30 at 583 Park Avenue, the events venue, there was a memorial for John Gutfreund who died two weeks ago on March 2, at age 86. He had been seriously ailing for more than two years.

John and Susan Gutfreund out on the town in 1991. Photograph by Ron Galella.
I knew of John Gutfreund long before I ever met him. Because of his wife Susan and their widely publicized glamorous and bi-continental life both here and in Paris. The Gutfreunds created a social splash that was worthy of reporting for its extravagance and style. Mrs. Gutfreund, a brilliant Francophile, an autodidact of history, society, and the decorative arts, created for herself and her husband, an interesting life hobnobbing with the international world of tycoons, European aristocrats, politicians, bankers, and scions of the lifestyle which she herself achieved. It was said that her husband, a major Wall Street banker, very much enjoyed the fruits of his labors through his wife’s interests and pursuits.

I later learned more about him as a businessman when he fell from grace – after a long and financially profitable ascent – at the Wall Street investment bank of Salomon Brothers & Hutzler, later just Salomon and then finally Philbro which acquired it. That acquisition was, in a way, John Gutfreund’s coup d’etat in the final wresting of control of the firm. It was also the beginning of the end of his career because of legal problems which arose  in the trading department shortly thereafter, and he resigned his position at the behest of his new boss Warren Buffet, and paid a multi-million dollar fine.

At the time of his legal problems, his reputation as a businessman became more public in newspaper accounts of the matter. The personality profile that emerged was a man who was very sharp mentally and could detect the weakest link in a deal or an individual involved in a deal with a split-second instinct. His personal executive style in presiding could be harsh to put mildly, and could provoke anger and resentment. His resignation provoked great public interest – particularly among his peers both socially and financially, as well as those of us who read those pages in our newspapers.
John and Susan Gutfreund and Ismail Merchant at the London Symphony Orchestra's 100th Anniversary in 2004.
Paul and Daisy Soros with Susan and John Gutfreund at Dalia and Larry Leeds' 50th wedding anniversary in 2006.
John and Susan in 2010.
John and Susan at their New York home in 2015.
My experience of knowing John Gutfreund came after his great fall, and at the time when I had begun writing about social life and New York, a little more than two decades ago. We met at dinners, and our entire relationship was basically dinner table conversation and acquaintanceship.

The King of '85 and the great fall of '91.
I came to know his wife Susan better, but the man I knew from the media and the gossip mills was -- aside from his reported professional circumstances -- gracious, stolidly intelligent, but quietly sophisticated, and without pretense. When I read in the obituaries last week that he had majored in English in college, and had considered being a writer or an actor or working in theatre, as a young man, I detected a kindred spirit underneath his patina of New York/Wall Street.

Monday afternoon, I arrived at 583 Park Avenue at 4:30, thinking that the memorial would begin at 5. The entire auditorium of this great Delano & Aldrich building was filled with little gold party chairs, the kind you might have seen at some of the larger dinner parties that the Gutfreunds gave in their day in the social swim. They were empty. I wondered why so many. I wondered what one might always wonder when a large number is expected; would they fill up? By 5 p.m. I was still wondering. And then, as if bell had rung, suddenly the crowds began trickling in, and then within minutes, by 5:30 all six hundred seats were filled and then some.

It was an older crowd, many who looked like businessmen, executives, lawyers, some of John’s contemporaries and many peers often with wives, along with others a decade or two younger. Also attending were a large contingent from the social worlds in which they’d dwelt. The room was simply but elegantly decorated -- all planned, I was told by his mother, John’s youngest son JP, who knew what would meet with his father’s agreement.
John Gutfreund with Susan and son J.P. in 1994. Credit: Ron Galella, Ltd.
When everyone was seated, another of John’s three sons, Owen Gutfreund, welcomed the guests and introduced John Rosenwald, another contemporary of  John Gutfreund. Mr. Rosenwald and his wife are very well known and popular philanthropists of many causes, cultural and otherwise here in New York.

John Rosenwald (pictured with wife Patricia) recalled being picked up each work day in John Gutfreund's green Oldsmobile convertible.
Mr. Rosenwald is a distinguished Wall Street banker – now a rara avis in that world that appears to be on a precipice of chaos. You can hear the natural humility in his words. He told us that he had known John Gutfreund all his life. They had grown up together. He recalled his first days on Wall Street in the early 1950s when it was quite a different place. It was not a place, he reminded his audience, that attracted young men coming out of college and/or into worklife. They were children of the Great Depression and its decimating effect on Wall Street and American business was still marking it. The Dow in those days was at 252.

He and John Gutfreund both started out in business at the same time, along with another friend, the late “Ace” Greenberg. John, he said, had a green Oldsmobile convertible, and he lived in a rent control apartment up on 94th Street and Lexington. Every workday he’d pick up Rosenwald and Greenberg in his car and drive down them to Wall Street. He explained to his two passengers early on that he was not going to charge them for the door to door service because their company was well worth the cost of fuel, etc. John Gutfreund was working as a bonds trader in those early days, and the three men all worked in different firms. Competitiveness was keen, Rosenwald said, but admired amongst each other. 
Ace Greenberg at his desk at Bear Stearns in 1980.
In Rosenwald’s recollections, you got the sense of a far different atmosphere and philosophy of the men of that time. They were ambitious, yes, but they were grounded by the traditions and the folkways of their generation, children of the Great Depression, soldiers of the World Wars I and II. Technology  only referred to matters scientific. The Wall Street work days were shorter -- by late afternoon, many of their members could be found at the various men’s clubs, engaged with a racquet, or for a swim, or a scotch at the bar, and home before six. $250 a month for a rent control apartment was considered expensive – although that rent would have garnered a well maintained four or five room flat.

After Rosenwald’s memories, Owen Gutfreund introduced David Tanner, Chairman of the Board of Trustees of Montefiore Medical Center in the Bronx. John Gutfreund served on the board for many years. Tanner recalled a very active board member who also volunteered at times in service in a variety of ways. He said that all board meetings were constructive with John Gutfreund’s presence. He was inclined to move things along, not to dwell on issues completed, and to call a spade a spade when something didn’t seem right or sensible. Tanner greatly admired his trustee for his brainpower and for the heart in his philanthropy.

Then Michael Bloomberg was introduced. The most famous member of the three speakers, Mr. Bloomberg noted that he was the only one who could make the claim of being both hired and fired by John Gutfreund – a remark which drew a lot of laughter from the audience.
Michael Bloomberg with John Gutfreund at Salomon Brothers in 1975.
Mr. Bloomberg recalled his interview by John Gutfreund for a job at Salomon in the mid-'60s. He was fresh out of  Harvard Business and had already been offered a job with Goldman Sachs. John Gutfreund concluded the interview by offering him a job at $9000 a year. It was five thousand less than what Goldman had offered. It was also not enough for him to live on, and he told his interviewer Mr. Gutfreund.

“How much do you need?” Gutfreund asked the young Harvard Business grad.


“Fine,” said Mr. Gutfreund, “I’ll pay you $9000 and lend you $2500 to make up the difference.”

Gutfreund was always, according to Mr. Bloomberg, impeccably turned out.
Mr. Bloomberg was disappointed but he took it. However, after the first year he was given a $2000 bonus for his good work, and it was deducted from the loan.

He talked about working for John Gutfreund. Where everyone worked in shirtsleeves, the head man was always well turned out impeccably in suit, vest and jacket. He was a taskmaster in that he expected the best from those working under him. But he was fair and although he was frequently momentarily given to some large and harsh language, it quickly passed and praise  was delivered when deserved.

Michael Bloomberg recalled that the two best things that happened to him in business at the beginning of his career was being hired by John Gutfreund, and then being fired by him a few years later.  Why he was fired, I do not know, nor is it important because as Mr. Bloomberg recalled in his speech, although it was a difficult moment in his life, everything turned out to be greater than anything he could have imagined for himself professionally. As the world is aware.

After Michael Bloomberg’s remembrances, John Gutfreund’s four sons went up on the stage – Nick, Josh, Owen, and JP. JP is the son of Susan, who was John’s second wife. Each spoke of a father who was interested, attentive, who shared his warmth and concern for his sons’ interests and ambitions, and supported their ideas while expressing the paternal instincts to guidance and admonition.

The wonderful program was completed by 6:15, after which many of the guests went over to the Gutfreund apartment on Fifth Avenue for a reception.

Memorials in New York are more frequent than actual funerals among the prominent, and they often draw a large crowd. Many New Yorkers who are active in the city’s life in one way or another, often know many people and even have hundreds of acquaintances as well as numerous friends. It is one of the aspects of metropolitan life that draws people. In John Gutfreund’s long life, he crossed paths with so many from all walks of life.

John Gutfreund’s memorial service was not so much one of grief or mourning, perhaps because at the end of his life, his failing health had made a long and difficult road for him to navigate. In their memoriam, Susan Gutfreund was credited with keeping his world stimulated, and often surrounded him with friends, including those men and women he’d known all his life.  John’s memorial was a tribute, well-earned and well-deserved, a man remembered for his caring and his conduct as a friend, a father, a husband and a member of the community.

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