just really impressed with the seriousness with which Merrill is approaching the telecom sector, the amount of resources they are throwing at it is huge, and the staff I will be able to hire there is larger than I would dare ask for here.” In other words, I’m outta here.
Mack understood and wished me well. My mind was made up and he had plenty of other fish to fry. So I called Merrill’s Andy Melnick and told him my decision was final. He arranged to send over movers in the morning to pack up my personal files and books. Then he called Rick Klugman, my associate at Morgan Stanley, and asked him to come down to Merrill so he could make an offer to him in person.
As I walked out of the office, thankful that my experience had been so great but equally excited for what came next, Linda Runyon, a bright, ambitious new hire who covered the cellular industry, accosted me. “You promised you’d stay here,” she said angrily, her piercing eyes staring into mine. I had recruited Linda six months earlier and she made me promise to stay put. I looked at her and said, “Just stay by your phone.” She, too, ended up shivering at Fraunces Tavern one morning. She came to Merrill with a huge pay raise a few months later, rose to the number one I.I. spot in the wireless telecom category, and stayed there until her retirement in early 2005.
My move set off a wave of musical chairs throughout the entire telecom analyst community, mainly because the BT (British Telecom) deal was fast approaching and the British government had said they would hire only banks with I.I. -ranked telecom analysts. This musical chairs game was good for all of us because we all got major raises. There was a perception of scarcity out there, and we milked it for everything it was worth.
At Morgan Stanley, the executives scrambled to get a replacement for me. They went after Frank Governali at CSFB, a well-regarded analyst who had turned down the Merrill job because he didn’t want the responsibilities of building a global team, especially the intense overseas travel that would entail. Frank agreed to take the Morgan Stanley offer, with a rumored price tag of $900,000, just one month after they had offered me $750,000. To add insult to injury, this one was guaranteed for two or three years and had nothing to do with the bankers making their budget. It was a nuclear arms race, with every analyst getting superpower status. Frank actually accepted the Morgan Stanley offer, but CSFB then matched it, agreed to let him relocateto Portland, Maine, and set up a one-man office just for him. So Frank decided to stay at CSFB.
Now it was April 1 and Morgan Stanley was losing valuable time. Someone suggested recruiting Jack Grubman from PaineWebber, since he was now ranked second, but Ed Greenberg put the kibosh on the idea, saying there was no way that Jack’s style would fit at Morgan Stanley.
Panicking, Morgan Stanley hired Stephanie Comfort from Salomon Brothers, a young woman who had garnered enough votes to become an I.I. runner-up, behind two others and me. I’m not sure what she negotiated, but the rumors were around $800,000 per year. And her move opened up the Salomon position, which nine months later, in January 1994, ended up going to Jack Grubman. Jack scored a salary said to be the highest on the Street, rumored at more than $2 million per year. This made Jack, who had worked for PaineWebber, a retail brokerage with no significant banking business, suddenly part of a major investment-banking house. At the time, no one could have known what that would mean.
Privatization Pandemonium
I had negotiated a one-week vacation between jobs, but vacation when you work on the Street is all relative. Merrill had dallied so long trying to get someone in this job that it no longer had any time to waste. Privatization was happening right now, and the big deal on the table was the competition to win a piece of British Telecom. The British government was preparing to
Mack understood and wished me well. My mind was made up and he had plenty of other fish to fry. So I called Merrill’s Andy Melnick and told him my decision was final. He arranged to send over movers in the morning to pack up my personal files and books. Then he called Rick Klugman, my associate at Morgan Stanley, and asked him to come down to Merrill so he could make an offer to him in person.
As I walked out of the office, thankful that my experience had been so great but equally excited for what came next, Linda Runyon, a bright, ambitious new hire who covered the cellular industry, accosted me. “You promised you’d stay here,” she said angrily, her piercing eyes staring into mine. I had recruited Linda six months earlier and she made me promise to stay put. I looked at her and said, “Just stay by your phone.” She, too, ended up shivering at Fraunces Tavern one morning. She came to Merrill with a huge pay raise a few months later, rose to the number one I.I. spot in the wireless telecom category, and stayed there until her retirement in early 2005.
My move set off a wave of musical chairs throughout the entire telecom analyst community, mainly because the BT (British Telecom) deal was fast approaching and the British government had said they would hire only banks with I.I. -ranked telecom analysts. This musical chairs game was good for all of us because we all got major raises. There was a perception of scarcity out there, and we milked it for everything it was worth.
At Morgan Stanley, the executives scrambled to get a replacement for me. They went after Frank Governali at CSFB, a well-regarded analyst who had turned down the Merrill job because he didn’t want the responsibilities of building a global team, especially the intense overseas travel that would entail. Frank agreed to take the Morgan Stanley offer, with a rumored price tag of $900,000, just one month after they had offered me $750,000. To add insult to injury, this one was guaranteed for two or three years and had nothing to do with the bankers making their budget. It was a nuclear arms race, with every analyst getting superpower status. Frank actually accepted the Morgan Stanley offer, but CSFB then matched it, agreed to let him relocateto Portland, Maine, and set up a one-man office just for him. So Frank decided to stay at CSFB.
Now it was April 1 and Morgan Stanley was losing valuable time. Someone suggested recruiting Jack Grubman from PaineWebber, since he was now ranked second, but Ed Greenberg put the kibosh on the idea, saying there was no way that Jack’s style would fit at Morgan Stanley.
Panicking, Morgan Stanley hired Stephanie Comfort from Salomon Brothers, a young woman who had garnered enough votes to become an I.I. runner-up, behind two others and me. I’m not sure what she negotiated, but the rumors were around $800,000 per year. And her move opened up the Salomon position, which nine months later, in January 1994, ended up going to Jack Grubman. Jack scored a salary said to be the highest on the Street, rumored at more than $2 million per year. This made Jack, who had worked for PaineWebber, a retail brokerage with no significant banking business, suddenly part of a major investment-banking house. At the time, no one could have known what that would mean.
Privatization Pandemonium
I had negotiated a one-week vacation between jobs, but vacation when you work on the Street is all relative. Merrill had dallied so long trying to get someone in this job that it no longer had any time to waste. Privatization was happening right now, and the big deal on the table was the competition to win a piece of British Telecom. The British government was preparing to
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