Alger ‘Duke’ Chapman, Who Sold Shearson to Weill, Dies at 81
Alger “Duke” Chapman Jr., who led Shearson Hammill & Co. through its merger into Sanford Weill’s Hayden Stone Inc. in 1974, a milestone in the growth of finance industry mega-companies, has died. He was 81.
He died on Feb. 18 at St. Vincent Medical Center in Little Rock, Arkansas, where he had retired, said his son, Sam. The cause was congestive heart failure.
In a career that included posts at the U.S. Securities and Exchange Commission, the New York Stock Exchange and the Chicago Board Options Exchange, Chapman spent 20 years as an executive at the Wall Street brokerage firm that was Shearson Hammill & Co. when he arrived and part of American Express Co. by the time he left. In the interim, according to his son, he tended to the human toll of the mergers and acquisitions that made Weill a legend in the field.
“He was always the nice end of what Sandy was up to,” Sam Chapman said yesterday in an interview. “Whenever they merged and they had to lay off people, my dad was the one who got handed the gun and he stayed up all night finding people new jobs.”
Weill, in an interview yesterday, called Chapman “a wonderful person” who had earned his trust as a business partner.
“I think Duke was really a terrific person that cared about his company, that cared about the people who worked for him,” Weill said. “I think that he did the best job that could have been done for his company in doing the merger with us.”
First, as Shearson’s president and chief executive officer, Chapman negotiated as an equal with Weill, who was chairman of Hayden Stone.
As Weill recalled in his memoir, “The Real Deal: My Life in Business and Philanthropy” (2006), he “put out feelers” to Chapman about a sale in 1973 and Chapman finally replied in April 1974.
“Meeting in a remote restaurant in Little Italy -- a place reputed to attract Mafia bosses -- Duke and I felt each other out,” Weill wrote in the memoir, co-written by Judah S. Kraushaar. “Shearson’s franchise remained solid in most respects but its shortage of capital had begun to squeeze the company.”
“I’m sure Duke and his partners would have preferred to remain independent,” Weill recalled. “Once again, though, one of the industry’s major firms had found itself in a corner with all too few options.”
In an oral-history interview with the SEC in 2011, Chapman said Shearson’s capital reserve had dwindled to a level that troubled leaders of the NYSE. Merging with Weill’s firm “cost a lot of bodies” and “more of them came from my firm than came from his,” Chapman said. “We were in more trouble.”
Weill emerged as chairman and CEO of the combined firm, Shearson Hayden Stone Inc., while Alger became co-chairman and chief operating officer. The firm became Shearson Loeb Rhoades as a result of further mergers, and in 1981, Weill sold it to American Express for about $930 million.
Alger stayed on, developing a private banking network as vice chairman of American Express International Bank. He left for Chicago in 1986 to be chairman and chief executive of the CBOE. Weill, after quitting American Express in 1985, completed a series of takeovers to create Travelers Group Inc., which merged with Citibank in 1998 to form Citigroup.
Alger Baldwin Chapman Jr. was born on Sept. 28, 1931, in Portland, Maine. His father, Alger Baldwin Chapman, was an adviser to New York Governor Thomas Dewey and served as chairman and CEO of Beech-Nut Life Savers Inc. His mother was the former Elizabeth Libby Ives.
He graduated from Williams College in Williamstown, Massachusetts, and from Columbia University Law School.
In 1961, after working for the SEC, he became vice president for legal, governmental and civic affairs at the New York Stock Exchange, according to a biography prepared by his son. He joined Shearson Hammill in 1966.
During his tenure at the CBOE, from 1986 to 1997, Chapman oversaw the expansion of listed equity options to 850 from 173 and of stock index option products to 35 from two, according to a news release from the exchange when he stepped down.
In 1998 he became vice chairman of investment banking and capital markets in Chicago for Amsterdam-based ABN Amro Group NV. He was CEO of ABN Amro Financial Services, responsible for the U.S. retail brokerage business serving, until his retirement in 2004.
His son, Sam, is CEO of Chicago-based Empower Public Relations and is married to the sex therapist Laura Berman, who has a show on the Oprah Winfrey Network. Additional survivors include his wife, Beatrice Bishop Chapman; two sisters, Carol Whitehouse and Hilda Dugan; three other sons, Alger, Andrew and Henry Chapman; and five grandchildren.
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