Turmoil At SalomonLeah Nathans Spiro
It was another day in the remarkable decline of Wall Street's premier trading house. At a grim managing directors' meeting on the morning of Apr. 18, Salomon Brothers Inc. reshuffled its top management and created a new operating committee and management board. The firm was also forced to amend a controversial compensation system that had led to the departure of some of its most talented traders and investment bankers. That same day, some six managing directors left the firm, bringing the total since December to 15, including three members of Salomon's executive committee, Richard J. Barrett, Martin L. Leibowitz, and Shigeru Myojin. These developments followed reports of horrendous trading losses, multimillion-dollar accounting snafus, and a potential credit-rating downgrade. The firm conceded that its 1994 results were "awful."
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