William "Billy" Salomon, who oversaw the growth of the Salomon Bros. bond trading house cofounded by his father into a Wall Street giant, died Sunday at his home in New York. He was 100.
He had a gradual decline in health leading to his death, said his son, Peter F. Salomon.
William Salomon, who was managing partner from 1963 to 1978, is credited with modernizing the firm that his father and two uncles started in 1910.
He broadened its focus beyond government bonds and into new markets, assembling a team that included analysts Sidney Homer and Henry Kaufman; William Simon, who would go on to serve as U.S. Treasury secretary; Lewis Ranieri, who would become known as the father of mortgage-based securities; and Michael Bloomberg, who would create Bloomberg LP, owner of Bloomberg News, and be elected New York City mayor.
Under Salomon's direction, the firm became an aggressive new player in the competition for underwriting business and a specialist in the high-stakes field of block trading. It also invested in computer technology to help handle the increased business.
With Merrill Lynch, Blyth & Co. and Lehman Bros., the firm formed the so-called Fearsome Foursome, which challenged the underwriting supremacy of Morgan Stanley and other old-line firms. To increase Salomon Bros.' capital pool, William Salomon changed rules to limit the take-home pay of partners.
After retiring in 1978 at 64, Salomon watched as the partnership was sold, transformed into a public corporation and ultimately folded into Citigroup Inc.
It was his hand-picked successor, John Gutfreund, who struck the deal that made Salomon Bros. part of Phibro Corp. in 1981. Salomon was informed only after the accord was reached.
"I was very upset," Salomon said in an interview with the New York Times. "I felt betrayed."
Gutfreund's reign ended with his departure in 1991, after the company admitted violating U.S. Treasury Department auction rules by placing orders for securities in the name of customers who hadn't authorized them.
In a 1991 interview with the Associated Press, Salomon expressed his displeasure at the direction of his former firm.
"In my time, the customer was God, and we would no more take advantage of him than we'd fly out the window," he said. "We always felt that if we did the right thing the profits would take care of themselves."
William Roger Salomon was born on April 2, 1914, in New York. Four years earlier, his father, Percy, and Percy's brothers, Arthur and Herbert, left their father's money-brokerage company to go into business themselves.
Their firm was Salomon Bros. & Hutzler, so named because they added broker Morton Hutzler, who had a seat on the New York Stock Exchange. Hutzler was dropped from the name in 1970.
In 1933, 19-year-old William joined the family business, having graduated from the King School in Stamford, Conn. Rather than attend college, he wanted to enter the workforce so he could marry his high school sweetheart, Virginia Foster. They were married from 1937 until her death in 2008.
Salomon became a bond salesman and made partner in 1944, just before leaving for two years of military service. Back at the firm, Salomon persuaded senior partners to stop withdrawing capital and instead move to a salary system.
In November 1963, he was named managing partner and steered the firm into buying exceptionally large blocks of stock from banks or pension funds and selling them in whole or pieces to other institutional investors. Such block trading required daring, because the firm would own the shares for a time while looking for buyers.
Many trading houses considered that too risky. Not Salomon, who summarized his attitude with three words: "We'll buy anything."
In addition to his son Peter, from Tucson, Ariz., survivors include a daughter, Susan Salomon Neiman of Los Angeles; four grandchildren; and three great-grandchildren.
Arnold writes for Bloomberg News.