The Last Old Boy: John O’Hara Would Have Loved This Guy, John Thornton

What, pray tell, has become of Wall Street’s WASP’s? More and more, it seems, they are coming up short in

What, pray tell, has become of Wall Street’s WASP’s? More

and more, it seems, they are coming up short in the boardroom in a Wall Street

environment that is placing less and less importance on the three-martini lunch

and old-school ties.

The New York–born-and-bred, summers-on-the-Vineyard-style,

St. Grottlesex-attending, Republican-voting gentlemen have all but vanished.

Some recent examples: Boston Brahmin and old-money paragon Hardwick Simmons

last year could not sell to his insurance bosses in New Jersey his dream of

taking his Prudential Securities into the bulge bracket. He resigned and now

runs that epicenter of new money, Nasdaq.

Then there was the patrician John Reed at Citigroup: He

became just another notch on Sandy Weill’s guitar.

Yalie Herb Allison, the

supposed chief-executive-in-waiting at Merrill Lynch, was told in 1999 by

Bronx-born David Komansky that he just didn’t have what it took. Going back a

bit further: S. Parker Gilbert in 1999 and Dick Fisher in 1997, Yale and

Princeton men respectively, may have made more graceful exits from the top

slots at Morgan Stanley, but exit they did. The bluest of the blue-blood firms

is now being run by a Utah-born former Sears executive, Phil Purcell, and the

son of a North Carolina wholesale grocer, John Mack-not a whiff of prep school

or the Ivy League in them.

With boardrooms on Wall Street becoming bloodier and

bloodier, the winners are proving to be those with a combination of relentless

ambition and Machiavellian skills-traits found more often than not in those who

have fought their way to the top without the advantages that entrée can confer;

in those who have been steeled, as well, by extended stints on the trading desk

at the head office or in the trenches with clients. Mr. Komansky at Merrill,

Mr. Mack at Morgan Stanley, Richard Fuld at Lehman Brothers and, of course, Mr.

Weill at Citigroup-the pattern has remained consistent.

“The perception that WASP’s are non-competitive is rooted in

fact,” says Nelson Aldrich, the author of Old

Money: The Mythology of Wealth in America , a social history of inherited

wealth and class in America. “Being aggressive when it comes to face-to-face

politics is much harder for these people. I have a sense that when Sandy Weill

looked into John Reed’s eyes, he saw a wimp. Not to say that John Reed is a

wimp, he is just a lot closer to being one than Sandy Weill is.”

Recently, however, one prominent exception has begun to

emerge at, of all places, Goldman Sachs (GS). The tussle within the investment bank

over whether or not it should go public ended the Wall Street career of Jon

Corzine (himself a University of Illinois grad who rose through the Goldman

ranks via the trading floor), and thrust current chief executive Hank Paulson

into the limelight. Out of the glare’s immediate reach, though, was a fellow

named John Thornton, Goldman’s co–chief president.

You may well not have heard of him-he has spent the vast

bulk of his Goldman career overseas building the firm’s investment banking

franchise in Europe and Asia-but this Manhattan-born product of Hotchkiss,

Harvard, Oxford and Yale has risen, quite suddenly, in the wake of Mr.

Corzine’s exit. Now, together with co-president John Thain, he appears to be on

the fastest of fast tracks to replace the 54-year-old Mr. Paulson when he

eventually retires.

It was the power

struggle which displaced Mr. Corzine-now a United States Senator from New

Jersey-that revealed to New Yorkers that the personable Mr. Thornton had the

fangs to fight the big fights in New York’s financial community. Mr. Thornton

may not have been the coup’s ringleader-Mr. Paulson as the other senior partner

assumed that role-but he was a very vocal supporter of it.

But in London, Mr. Thornton has left his mark-and

scars-bringing to the Old World a bit of the down-and-dirty dealmaking that

builds chief executives here.

He’s also well-bred,

educated and connected-a coalition of old and new. Could he really be … the

last WASP on Wall Street?

Corzine’s War

As far as displays of boardroom maneuvering go, Mr.

Thornton’s Goldman Sachs gambit was a fairly steely one: He took issue with a

senior partner on probably the biggest strategic question in the firm’s long

history; helped build a consensus within Goldman; and, together with Mr.

Paulson and Mr. Thain, presided over Mr. Corzine’s departure. Impressive work

for an M.&A. macher with no

trading experience; one who had not worked out of the home office since 1985;

and one whose preppy visage-horn-rimmed glasses, a firm chin and a floppy shock

of hair kept just a bit too long-is a constant feature in the U.K. financial

press, but has yet to appear in the New

York Times business section.

Mr. Thornton rarely speaks with the New York press, and he

declined to be interviewed by The

Observer. Goldman Sachs also declined to cooperate. But others familiar

with his career and the Corzine affair did speak.

Mr. Corzine might have

won the battle-Goldman did go public and now, with its larger base of capital,

is all the more formidable a player on the Street these days. But he lost his

war. The concerns of Mr. Thornton and team regarding Mr. Corzine’s management

style and vision carried the day. For Mr. Thornton, it wasn’t just a question

of culture dilution; in fact, he was well aware of the advantages that an

I.P.O. would bring to Goldman. Yet, said those familiar with his thinking, he

kept coming back to a few questions during the countless hours of executive committee

meetings held in New York and London: What happens after we go public? What

happens five years down the line? And, if going public opens up the Pandora’s

box of merger issues, what will happen to us then?

Mr. Corzine, for the most part, sidestepped these questions;

for him, going public was an end in itself. It would be his legacy, and as

senior partner he would make it happen on his own, regardless of what his

partners on the executive committee might feel. Mr. Thornton and his colleagues

were, as a result, put off by Mr. Corzine’s increasing tendency to act like a

public company chief executive, even while the company was still a

partnership-especially in the case of the Long-Term Capital bailout, where Mr.

Corzine so vocally supported the use of both public and firm capital to prop up

the ailing hedge fund.

So they came to an agreement. Mr. Corzine could have his

I.P.O., but would agree to leave the firm afterward. Reluctantly, Mr. Corzine

complied and used his vast take to run the most expensive Senate campaign in

U.S. history. That left John Thornton at the fairly young age of 47-with his

co-president John Thain-on the verge of running Wall Street’s most prestigious


“The Street’s exposure

to him may be limited, but he is an impressive figure,” said Morgan Stanley

Dean Witter securities analyst Henry McVey. “He is not the kind of guy that

corporate clients or investors will take lightly.”

He brings to the task an impeccable background. The son of

two well-born Manhattan lawyers, Mr. Thornton grew up comfortably in Bronxville

and did his summering in East Hampton, where he would hone a tennis game that

became good enough to make the Oxford squad. At Hotchkiss, he edited the school

paper and captained the tennis and basketball teams while also developing a

lingering taste for that old hippie group, Buffalo Springfield.

Harvard in 1972 was the

next inevitable step, where he studied American political history-followed in

1976 by two years at Oxford, where he read law, and two years studying public

and private management at the Yale School of Organization and Management. A

summer internship at Goldman Sachs in 1979 led to an entry-level job in

Goldman’s fledgling M.&A. division in 1980.

There, he quickly caught the eye of M.&A. swami Geoff

Boisi, who was in the process of making a name for himself as one of the

Street’s more renowned takeover artists. His career seemed set: The 80’s merger

boom was just taking off, and Mr. Thornton had powerful patrons in the likes of

Mr. Boisi and investment banking co-head Stephen Friedman. His timing could not

have been more fortuitous. So in 1985, when he volunteered to work in Goldman’s

threadbare M.&A. department in London, people thought, quite simply, that

he was nuts.

London was calling, though, and off he went, his competitive

juices stirred by the challenge. By 1988 he had made partner, and by the early

1990’s Mr. Thornton had turned the British banking establishment on its head as

he imported hard-nosed U.S. investment banking techniques into what had been a

staid and very well-behaved M.&A. environment. Camping out in restaurants,

relentless calls to potential clients-he would do whatever it took to bring a

reluctant city establishment over to his side.

Mr. Thornton’s defense in 1991 of English chemical firm ICI

from the clutches of corporate raider Lord Hanson remains a part of London

financial lore. An enraged Lord Hanson publicly blamed Mr. Thornton for using

“dirty tricks,” asserting that he hired private investigators and leaked to the

press, charges that ICI and Goldman Sachs denied.

By 1995, however, Goldman Sachs’ London M.&A. division

had become the dominant force in the takeover-defense market. Today there are

4,700 people in the London office, compared to 72 when Mr. Thornton arrived. In

1996, Mr. Thornton, by then co-head of European operations, took charge of

Goldman’s Asian division.

In the process, he collected friendships, many with the true

titans of corporate Britain: Charles Miller Smith of ICI, Sir  John Browne of B.P., Richard Branson of Virgin

and Rupert Murdoch of News Corporation. Mr. Thornton’s peers say that it is

this ability to make and keep powerful friendships that lies at the very heart

of his success as a banker.

“He has an unusual

ability to really put himself into the client’s shoes,” says Lord Brian

Griffiths, who served as head of policy under former Prime Minister Margaret

Thatcher. “He can immediately see the right strategy for them. I remember the

first time he met with Rupert Murdoch to discuss his Asia strategy. They hit it

off like a house on fire, and have remained great friends since. He really has

that quality to him of an international athlete.”

His mastery is in relationships. Says one banker who has

worked with him in the past, “The first thing John will ask you when he comes

to visit is, ‘Who are the 100 most influential people in your region, and do

you have a relationship with them?'”

Indeed, it’s a skill that dates way back. At Hotchkiss, he

was pals with Ford Company chairman William Clay Ford Jr. and now sits on the

Ford board (he also sits on the board of Rupert Murdoch’s U.K. broadcasting

arm, British Sky Broadcasting). At Harvard, he was a favored intern in Teddy

Kennedy’s Senate office. The best man at his wedding was John Eastman, the

well-known arts and entertainment lawyer and brother of the late Linda

McCartney. He has vacationed in Tuscany with Bill Bradley (he rents a villa

there), for whom he actively stumped and raised money during the primaries.

Bankers who have worked

with him suggest that his ability to connect with people one-on-one is the key

to his success. “You can walk into a room of 300 people and not know that he is

there,” says one. “But get him in a room with someone … it’s a real gift. He

has the ability to influence your thinking.”

Frequent Flyer

In 1996, Mr. Thornton was named chairman of Goldman Sachs

Asia and was asked by Mr. Corzine and Mr. Paulson to do on that continent what

he had done in Europe. By all accounts, he is a ferocious worker, with two

secretaries-one in London, where he is still based, and another in New York,

where he also keeps an office-as well as a chief of staff he hired away from

the U.S. State Department.

He is a relentless traveler. He has been to China twice in

the past four weeks, pushing Goldman’s case for the upcoming I.P.O.’s of the

Bank of China and China Telecom. He was also recently in Latin America, meeting

with clients as well as incoming Mexican President Vicente Fox.

He still however, spends every weekend with his wife and

their three children at their home in Belgravia in West London. His wife is a

Tennessee Williams scholar from Charleston, S.C., where they are restoring a

$1.3 million ante-bellum mansion. He has been known to host high-minded client

dinners at Davos with the likes of British author Ben Okri and Jung Chang, the

author of Wild Swans ; and he is

reported to have seen the classic cult film

Harold and Maude more than 20 times.

Yet, he is driven. “John likes to win,” said a former


He also carries an unswerving self-confidence in his own

abilities – and the hint of unassuming ease consistent with his background.

“There is something old-fashioned about him,” said Alan

Parker of Brunswick, a well-known City of London P.R. firm, who has worked many

a deal with Mr. Thornton. “There is a sense of him being very understated. It

has never been about the money, but more that every deal he did and does should

be done perfectly.”

To be sure, not everyone

loves him. “He is a real dick,” says one rival banker who, not surprisingly,

did not want to be identified. “How do you think he got to where he is now?”

Maybe so, but this much is also true: No one sees a wimp

when they look into John Thornton’s eyes.

Perhaps that is what it takes for a WASP to win on Wall

Street these days: Know the right people, make yourself indispensable and

always cultivate the killer instinct within you. You never know when you might

need it.

The Last Old Boy: John O’Hara Would Have Loved This Guy, John Thornton