Making Peace

By Bill Saporito

He was a Wall Street upstart from Brooklyn 50 years ago. Since then, Citigroup chairman Sandy Weill got rich and famous building an empire that culminated with the Travelers-Citicorp merger in 1998. In the process he walked away once and busted up with friends like Jamie Dimon. Weill, 73, has written The Real Deal, on his dealmaking and how things could have gone smoother. He spoke with TIME's BILL SAPORITO about mending fences, how to keep marriages strong and his focus on philanthropy.

There's been a lot written about you. Is this new book a chance to even the score?

Over time, I've rationalized what happened in a lot of different events, and it turned out, in my rationalization, that most of the time I was right. I knew that that was never the case, so I went and got a collaborator who was very well briefed and knowledgeable about the banking and financial world--the No. 1 analyst at Merrill Lynch--and he spent time interviewing everybody whose name is in the book. These were people whom I was mentoring like [Shearson's] Peter Cohen or [Citigroup's] Jamie Dimon; or John Reed, after we did our merger. One of the interesting things in spending two years working on a book is that it is a little cathartic. People whom I had grudges about--I felt that it's enough time and life is too short. Most of these people have been successful in other careers, and that's a good thing. Maybe it's time to renew our friendship.

So have you learned a better way to part with people or fire them?

I've never been very good at firing people. I've been always very loyal to people, and loyal to a fault when somebody was starting to do the wrong things. I just let those people be in the company way too long, until the problem became bigger. I always liked somebody else to do the actual firing or letting go or having that difficult conversation, which I was never quite up to. I think the one time I actually did do it myself was when John [Reed, his co-CEO at Citi] and I decided to tell Jamie [Dimon, a Citi president and his longtime protege] that this was not working out. I felt that I had enough of a relationship with Jamie that I should be the one who tells him, which I did. But it was not easy.

The Citicorp and Travelers Group merger worked financially, but there were problems with top management and between you and John Reed. What happened?

People have different strengths and weaknesses, and my strength was not the ability to confront people. My strength was much more in the ability to evaluate where business was going, and getting it to grow by encouraging all the people in the company to make the decision pretty fast about who should stay and who should go. Because when you don't make those decisions, nobody knows better that you're not making the sensible decision fast enough than the people who are working in the company.

Has Citigroup got too big?

It's not even close to being too big, is my personal point of view. Our market share in a lot of the growth markets for financial services around the world may be 3% or 4%. It can be a multiple of that.

You're a numbers guy, but you used to pal around with Johnny Carson and Muhammad Ali.

When I got married 51 years ago, I was a very shy person and my wife was more outgoing. She used to push me at night to make the sales calls, to speak to people--The kids gotta eat.

You've always relied on your wife Joan for consultation--a personal vice president.

I would say personal president. She was my adviser, my confidant, but never a person who interfered in business. She made sure that people knew that she didn't understand the business, that I was the one who was running the business. But she has very good judgment about people and feelings and me: my strengths and my weaknesses. She was invaluable that way.

Is that why you've always been inclusive of spouses and partners of your employees?

Any company that doesn't do that is making a major mistake. If you are inclusive, most of the time you will end up having two supporters in that household, rather than just one, have somebody at home who understands what the issues are and can speak intelligently to their partner about those issues, so you're not just saying, "Yes, dear." The person knows something else, they've met other people--maybe they've met at an event [and] they can say, "I know this person. He or she is not the way you describe them."

As much of a risk taker as you are when it comes to deals, you're at the same time very conservative with the balance sheet. How can those two coexist?

The only exception to that was when we [Travelers] reached to buy Primerica from Gerry Tsai, which was leveraged as it was. We leveraged it more because it was bigger than our company. We had to really pay attention to everything until we got our balance sheet back in line, which took about a year and a half. But most everything else we did in a very financially conservative way so that we really weren't risking things.

That's a much different philosophy than what we're seeing today with private equity.

Private-equity groups have had incredible access to the market. They've raised a lot of new equity to invest--the financing terms are incredibly liberal, so they can leverage it without a lot of handcuffs. People being able to express themselves freely and evaluate and come to conclusions--that's what markets are all about. Eventually it will get to a point where its grip becomes too much and it stretches too far, and there will be another reaction.

That's called a bubble.

Bubbles are great until they break. I've personally never been an investor, really. It's never been what I've done, except for investing in whole companies. With very few exceptions, the only stock that I've owned has been our Citigroup stock for the past 20 years.

But it's not your problem these days, right?

I'm chairman of three major nonprofits. Since 1991, I've been the chairman of Carnegie Hall, and of the Cornell Medical College since 1996. I'm also the chairman of the National Academy Foundation, which started 25 years ago to show people in inner-city schools that there is an opportunity education is the key to unlocking that future. If we don't do that, the divide between the wealthy and those who don't have anything is going to get even wider. If that happens, this country is not going to be a leader in this world 20 years from now.