Dick Fuld

Dick Fuld was the final Chairman and Chief Executive Officer of Lehman Brothers. He began his career with Lehman Brothers in 1969, and steered Lehman through the 1997 Asian Financial Crisis. In 1993 Lehman had a yearly loss of $102 million, but after Fuld became CEO in 1994, after the firm’s spinoff from American Express, the firm had fourteen years of profits, including one of $4.2 billion in 2007.

In 2006, Institutional Investor magazine named him the US’ top chief executive in the private sector. In December the same year, Fuld told The Wall Street Journal, “as long as I am alive this firm will never be sold.” In March 2008, Fuld appeared in Barron’s list of the 30 best CEOs and was dubbed “Mr. Wall Street”. At the same time he was nicknamed the “Gorilla” on Wall Street for his competitiveness.

It is said that the downfall of Lehman Brothers came about because it had become so involved in mortgage origination that it had morphed from being an investment bank into a real estate hedge fund. This drove up company earnings through excessive leverage and risk, but meant that at the height of the subprime mortgage crisis, it was vulnerable to any downturn in real estate values.

By 2008, Lehman Brothers had assets of $680 billion supported by only $22.5 billion of firm capital. As the subprime mortgage crisis began to bite, on September 10, 2008, Lehman announced a loss of $3.9 billion and their intention to sell off a majority stake in their investment-management business, which included Neuberger Bermanon. On 15 September it reported a second quarterly term loss of $2.8 billion and filed for bankruptcy under Chapter 11. It subsequently announced a sale of major operations to parties including Barclays Bank and Nomura Securities.

For the years 2000 – 2008 Fuld took about (£173 million) in pay and bonuses. He is now said to be worth $160 million. In 2009 Fuld launched Matrix Advisors which helps small companies with business development and access to capital markets.

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