PEOPLE : Bateman Eichler Chief Richard Capalbo Quits

Richard J. Capalbo, chairman and chief executive of Bateman Eichler, Hill Richards regional brokerage, has resigned to pursue other interests and has been replaced by Allan L. Sher, former vice chairman of Drexel Burnham Lambert.

Industry insiders had speculated that Capalbo was not long for Bateman since Chicago-based Kemper Corp., parent company of the Los Angeles brokerage, last month announced plans to consolidate some operations of its five regional brokerages and to lay off about 600 of the firms’ 5,200 employees. The move, prompted by the slowdown in the securities industry, was seen as greatly reducing the authority of the regional brokerage heads.

But James R. Boris, chairman and chief executive of Kemper Securities Group Holdings and Capalbo’s boss, said the 43-year-old executive was not forced out but decided to leave on his own.

“We worked together for just a few months,” said Boris, who took his position in January, “but we found we had considerably different management styles, and he decided it was best for him to move on.”

Neither Capalbo nor Sher was available for comment.

Boris said the appointment of the 58-year-old Sher, who had headed West Coast operations for Drexel, “should send a clear message that we are fully committed to the retail brokerage firm.”

Capalbo, an aggressive salesman who once worked for Drexel, had beefed up Bateman’s nontrading operations, including investment banking and municipal finance, only to see those businesses greatly reduced in the consolidation.

“This is no surprise,” said one investment banker. “Richard is leaving because of the fact that the whole regional autonomous stand-alone nature of Bateman is leaving with him. . . . Capalbo didn’t want to be Boris’ puppet.”

“The ‘80s are over, and the ‘90s have begun. I think Kemper is pulling in its horns,” another investment banker said. “This is not a cheap business to be in,” and Bateman was believed to be losing money, he said.

Sher also was a director and member of the executive committee of Drexel, which filed for bankruptcy law protection in February. Sher began his career in the securities industry in 1956 with Merrill Lynch & Co.