New Chief Named for Smith Barney Shearson : Finance: The appointment of Wall Street investment banker Robert Greenhill may boost clout of new company.

Primerica Corp., seeking to bolster the financial clout of its soon-to-be-merged Smith Barney Shearson securities brokerage, on Thursday named one of Wall Street’s most respected investment bankers to head the unit.

Robert F. Greenhill, 57, former president of Morgan Stanley Group, was named chairman and chief executive of Smith Barney Shearson.

Smith Barney insiders said Greenhill will help the giant firm expand its underwriting and investment banking activities to help supply investment products for Smith Barney Shearson’s huge network of 10,500 retail stock brokers to sell.

The surprise appointment of Greenhill comes as Primerica this summer completes its $1-billion acquisition of Shearson and merges it with Smith Barney, Harris Upham & Co., creating Wall Street’s second-largest brokerage after Merrill Lynch.

Greenhill will succeed Smith Barney Chairman and Chief Executive Frank G. Zarb, 58, who becomes a “group chief executive” at Primerica with wide-ranging responsibilities. He will be in charge of corporate administration and will manage four of the diversified financial services company’s subsidiaries, not including Smith Barney Shearson.

When Primerica’s acquisition of Shearson was announced in March, Primerica Chairman and Chief Executive Sanford I. Weill had said Zarb would continue to head the brokerage subsidiary. Weill, 60, said Thursday, however, that he has decided to take advantage of the availability of Greenhill, Weill’s longtime financial adviser, to make a series of management changes.

Greenhill, intimately involved in the merger mania of the 1980s, until March had widely been thought to be in line to become Morgan Stanley’s chairman. But he was removed from the line of succession when he was replaced as Morgan Stanley’s president that month. He had been at Morgan Stanley for 31 years.

As part of his contract, Greenhill agreed to make an unusual personal financial commitment to his new job: On Wednesday, he spent $34.5 million to buy 750,000 shares of Primerica stock at $46 per share. A Primerica spokeswoman, addressing questions about whether there was any impropriety in Greenhill buying stock before the announcement of his appointment, said the shares were restricted stock purchased directly from Primerica. She said the stocks cannot be resold without registration with the Securities and Exchange Commission.

“The fact that I stepped up to put my own money into it is just an expression of my own confidence (in Primerica and the Smith Barney-Shearson merger), and I have no doubt this is going to be successful,” Greenhill said.

After Primerica announced a series of top management changes that included the hiring of Greenhill, Primerica’s stock closed Thursday at $49.25, up $3.50 in trading on the New York Stock Exchange.

Weill said Greenhill signed a seven-year contract with compensation tied to how well Smith Barney Shearson performs but declined to give further details of his pay. Greenhill will become a Primerica director in July, Weill said.

The announcement of Greenhill’s move came just as one of the major deals he had been supervising for Morgan Stanley collapsed: the planned $1.7-billion offering by RJR Nabisco Holdings of stock in its Nabisco foods unit. RJR canceled the offering Wednesday, after investors showed little enthusiasm for it.

Zarb said Wednesday that the merger of Smith Barney and Shearson will result in the loss of between 1,000 and 1,200 jobs. He said the figure was in line with previous projections and that all those being let go have been notified.

As part of Primerica’s executive changes, Robert I. Lipp, 55, chairman and chief executive of Primerica’s Commercial Credit subsidiary, will give up those posts to join Zarb as a Primerica group chief executive. Lipp will have management responsibility for several units, including Consumer Finance Services, Commercial Credit and the Gulf Insurance Company, as well as overseeing Primerica’s relationship with The Travelers Insurance Group, in which Primerica owns a 27% stake.

Zarb will oversee Primerica units including Primerica Financial Services, two money management firms and Transport Life Insurance Co.