William Salomon, Who Modernized Family’s Firm, Dies At 100

William “Billy” Salomon, who turned Salomon Brothers, the bond trading house co-founded by his father, into a Wall Street force in stock trading and underwriting, has died. He was 100.

He died on Dec. 7 at his home in Manhattan following a gradual decline in health, his son, Peter F. Salomon, said today in an interview.

First as part of a three-member governing committee, then as managing partner from 1963 to 1978, Salomon modernized the firm that his father and two uncles had started in 1910.

He broadened the firm’s 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 serve as New York City mayor.

Under his 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, and it invested in computer technology to help handle the increased business.

With Merrill Lynch, Blyth & Co. and Lehman Brothers, the firm formed the so-called Fearsome Foursome, which challenged the underwriting supremacy of Morgan Stanley and other old-line firms. To increase the firm’s capital pool, William Salomon changed rules to limit the take-home pay of partners. In 1970, the firm moved to 1 New York Plaza, at the tip of Manhattan, from 60 Wall Street, its home since 1922.

Retain Capital

“The decision to retain capital -- to sacrifice the present for the future -- was to be Salomon’s most important contribution,” Robert Sobel wrote, of William Salomon, in his history of the firm.

After retiring in 1978, at 64, Salomon watched as the partnership was sold, transformed into a public corporation and ultimately folded into today’s Citigroup Inc.

It was his hand-picked successor, John Gutfreund, who struck the deal that made Salomon Brothers part of Phibro Corp. in 1981. Salomon was informed only after the accord was reached.

“I was very upset,” Salomon later said, according to the New York Times. “I felt betrayed.” He said had left the firm in Gutfreund’s hands “in the hope and expectation that we would remain a general partnership for a long time.”