Jumping Jimmy
I am starting this story today because yesterday the news shot around the world that Jimmy Cayne, the controversial long-time CEO of Bear Stearns died at age 87, probably with a cigar in his mouth. I want to tell my story about Jimmy Cayne, but I probably need to take my time and not rush it to print since it brings up many mixed emotions, some of which are not particularly attractive. Therefore, I am jotting this down today to remind myself to slowly but surely contemplate and write down my thoughts about the man who passed on the same day that John Madden (85 year-old football coach and commentator) and Harry Reid (82 year-old Nevada politician and ex-Senate Majority Leader).
I first met Jimmy Cayne in 1989 when he was President of Bear Stearns, but not yet CEO. I was on a flight from London back to NYC when I saw the guy from Bear Stearns who handled the LDC Debt trading operation at Bear, a guy whose name I don’t recall, but who knew me as a high-profile player in the LDC space. I was running the Emerging Markets Department of Bankers Trust Co. at the time and we were a leader in both deep-discount debt trading and Emerging Market Debt-for-Equity swaps, both areas that we pioneered during my tenure of building and running the business. That guy was traveling with Cayne on business and he introduced us. He must have given him a quick bio on me before he did that because Cayne pretended to know all about me and he put the moves on me suggesting that I should leave BTCo. and move over to work for him at Bear. All of that happened in about 15 minutes. I was a pretty senior partner at BTCo. at the time and it was the only place I had ever worked. I had zero interest in moving and I actually found his advances somewhat off-putting since it was both too fast and too easy to have any credibility. Nevertheless, I was impressed that a President of Bear Stearns, a scrappy but rising investment bank at the time, had me in his sights suddenly.
While I didn’t take him very seriously about the job offer, I did take him up on his offer to drive me into the City since his personal limo was waiting at the airport for him. The odd part of that ride was that he insisted on getting dropped off at his West Side apartment first and then made a grand gesture of telling his driver to take me anywhere I wanted to go. I had him take me to my little apartment in Battery Park City. The next day I ordered a box of the best cigars I could find and had them delivered to his office with a note thanking him for the ride. It cost me far more than a cab from the airport would have, but I thought it might make a valuable impression.
I never heard from him again until 2003 when I was called to go to a meeting with Warren Spector, the then Co-President of Bear Stearns. He was looking for a new head of Bear’s asset management business and he had heard good things about me. By 2003 Bear had been named Best Investment Bank by Fortune Magazine for two years in a row (beating out Goldman Sachs both times). Warren asked me to come back to meet Jimmy Cayne the next day. I did and it was the first time I was in Jimmy’s infamous black ebony lair on the 6th Floor of the new, ultra-high-tech Bear building at 385 Madison Avenue. Why the 6th Floor rather than the 42nd Floor? Because the FDNY ladders could only reach up to the 6th Floor, or so the urban legend goes. I tried to remind Jimmy that we had met fifteen years prior, but he didn’t seem to remember or care. In fact, he was a bit dismissive and said Warren really wanted to hire me and while he wasn’t so sure, he was inclined to let Warren make his own mistakes. What a nice welcome from a man who had been eager to hire me in 15 minutes 15 years before.
Shortly thereafter, I joined Bear Stearns as the Chairman and CEO of Bear Stearns Asset Management, reporting to Warren Spector, the fair-haired boy of Bear Stearns. It took me some hard thinking to decide to join Bear since I had two other offers at the same time, one from Apollo to run one of their portfolio companies (that is a whole other story) and one to get funding for a major private equity roll-up in the pension processing arena, something I had put together and worked on for nine months. I chose Bear knowing it was the rough and tumble road in extremis, but knowing that I would regret it if I didn’t take the challenge.
I next saw Jimmy Cayne about two months after I started. I had been given the challenge of keeping the woman I replaced (an ex-Goldman Sachs person who had failed miserably at building the BSAM business) as my deputy, not an ideal situation by any means. One day I say the name Cayne pop up on my phone and it was his secretary commanding to come to his office immediately. I had no idea the reason for the call. As I walked into the black lion’s den, Jimmy pushed the button he had on his desk that closed all the doors. I saw two other members of the Executive Committee sitting on his sofa, Alan Schwartz, the other Co-President, and Sam Molinaro, the CFO. Jimmy was sitting at his big desk smoking his cigar, a direct violation of all NYC smoking ordinances in office buildings. I could tell this was going to be a doozy of a meeting.
Before I could even sit down, Jimmy shouted at me through his illegal cigar smoke, “What the fuck are you talking about with Donny (the woman who was my deputy)?” I told him I had no idea what he was talking about. He referenced the notion that I had been discussing her engagement to a Vice Chairman of Bear and that it was in contravention of the Bear anti-nepotism policy put in place by the Chairman, Ace Greenberg, the only person in the building MORE powerful than Jimmy. I explained that Donny had told me about her impending nuptials because how else would I know about it. Furthermore, I said that she had explained to me that it didn’t matter that there was an anti-nepotism policy since Jimmy himself had granted them a dispensation. At that Jimmy immediately turned to his audience on the sofa, Alan and Sam, who were there to witness his whipping of Warren’s new guy while Warren was out of town, but they were not there to hear things that might get back to Ace about Jimmy overriding one of Ace’s signature policies. Suddenly the tables had turned. He swore to those two that he had done no such thing and that that “bitch Donny” had better keep her mouth shut. He then waved his hand at me to leave and as I turned to go I was pretty sure that I noticed a small, almost imperceptible smile on Alan Schwartz’s face as he looked at me in the eye with what I took for some degree of respect.
If I had not been on the Management Committee at Bankers Trust and been around the block a few times on Wall Street Power tactics (like when John Mack, then head of Credit Suisse, tried to hire me as CFO against the wishes of his team of infighting subordinates, or when Ken Chennault of American Express tried to hire me against the wishes of his fair-haired wannabe successor), I might not have been as calm on entering Cayne’s lair that day. As a side-note, Donny self-immolated shortly thereafter causing the General Counsel of Bear to escort her to the door and take her ID card.
Over the next four years I spent many many hours in the presence of Jimmy Cayne and I can honestly say that I never met a pettier or more rudely crass man in all the boardrooms I’ve been in. I know that people say he was brilliant and use his track record in the bridge circuit as evidence, but I know he bought many of his bridge trophies by hiring world-class players for his team and then taking credit for their play. I do not want to dredge up all the awful stories about the man because they are too many and he is dead now and his reputation parted company with him long ago. There is no disgrace in failure, but that is not so for failure to act in a civil and honest manner. From my experience Jumping Jimmy was neither honest nor civil and his passing just means to me that there is a little less evil out there in the world today.