When Washington lawyer Vernon E. Jordan Jr. agreed to join Lazard Freres & Co., bankers at the private Wall Street firm were giddy over the cachet--and business--it would bring. "With so many senior people leaving, he was seen as one of the few who could get CEOs on the phone," one executive recalled.
But three weeks into his new career as an investment banker, Jordan is already causing a stir among some of his new partners.
Investment bankers were first annoyed that Jordan's compensation was kept secret from other partners--an unusual step at Wall Street's last major partnership. Then, sources said, it was unclear whether some of Jordan's corporate contacts could be more of burden than a help. And now, word of Jordan's actual compensation has sent the firm's veteran bankers into a tizzy.
A source with knowledge of Jordan's contract said Jordan was promised $5 million a year for five years, plus a housing allowance toward an expensive suite at the posh Regency Hotel and bonus based on performance. Lazard partners generally earn from $500,000 to $10 million, but average perhaps $3 million a year.
"Don't forget, he has absolutely no investment banking experience," a former partner said.
Jordan, a close friend of President Clinton, won't talk about his deal. Meeting with a reporter today in his sparsely furnished corner office, on the 62nd floor of a building in Rockefeller Center, he alternated between smooth dismissal and disdain. "Did you come all the way here in the cold to talk about rumor and innuendo?" he asked.
"I invited you here because you said you wanted to verify this information," Jordan said. Verification, alas, was not forthcoming. "No comment," he said, a huge smile spreading through his face.
He added: "You know what I told [Washington Post Reliable Source columnist] Lloyd Grove when he asked me, when I was hired, how much I was making? I said it's none of your damn business."
That's essentially what Lazard Chairman Michel A. David-Weill and chief executive William Loomis told partners in New York when they inquired about Jordan's salary. The secrecy was a shock to many fellow executives, because the firm has been pushing in recent years for a more open policy among partners under the leadership of Steve Rattner, who recently stepped aside as chief executive.
"This special treatment of Jordan was a huge symbol that they are returning to their old ways of doing business," said an investment banker, who was part of a recent, unrelated, stream of departures.
Jordan said this was the first he was hearing about the angst. "I have been warmly, enthusiastically accepted," he said.
Loomis said that Jordan has been acting as a house diplomat, meeting with partners one on one, weighing their strengths and trying to coordinate their duties and the firms' goals. The firm has been going through a major overhaul recently.
"For the first two or three days, he was calling in associates and making them feel proud to be here," Loomis said. "He will be as important at influencing the firm internally as he will be in getting new business."
Jordan jovially uses investment banking lingo to describe the situation. "In banking terms," he said, "I view my job here as accretive."
People in the firm say that Jordan also immediately began dialing up his vast corporate contacts--starting with the heads of the 10 major companies where he serves on the boards of directors. But bankers said it remains to be seen whether these types of contacts help or hurt him, as corporations become increasingly averse to cutting business deals with directors.
His arrival was designed to help turn around the firm, which has lost some of its prestige since the retirement of Felix Rohatyn, the legendary banker who became U.S. ambassador to France. Its profit has dropped, sources said, from a peak of $300 million in 1998 to slightly more than $200 million last year, and several luminaries have left. Last summer David-Weill said that he would combine the company's offices in New York with those in Paris and London, but the move has not yet happened.
Jordan, 64, left New York in 1982 to join the Washington law firm Akin, Gump, Strauss, Hauer & Feld, where he still remains "of counsel." He advises many huge corporations there. "I don't come here as a stranger," he said. "I've been deal-making, in a way, for a long time."
Jordan still lives in Washington but spends four nights a week at the Regency Hotel in New York, near three of his four children.
"It's very exciting, at my age, to be learning new things," he said today. "I am just starting to look around here, figure out what needs to be done. You cannot underestimate how charged up I am about this."
IN PROFILE: Vernon E. Jordan Jr.
Position: Senior managing partner, Lazard Freres & Co.
Age: 64, born in Atlanta
Education: BA, DePauw University, 1957; law degree, Howard University, 1960
Career highlights: Civil rights lawyer, 1961-62; field secretary, NAACP, 1962-64; Voter Education Project, Southern Region director, 1964-68; United Negro College Fund Inc., executive director, 1970-71; National Urban League Inc., president, 1971-82; Akin, Gump, Strauss, Hauer & Feld, senior partner, 1982-present.
Awards: Honorary degrees from many colleges and universities including Howard, Notre Dame, Princeton, Tulane and Yale
Other: Director of various organizations including American Express Co., Dow Jones & Co., Ford Foundation, Revlon Group.
SOURCES: Bloomberg News, Who's Who
CAPTION: Vernon Jordan leaves his D.C. home, top, at height of the Monica Lewinsky scandal; is deposed, left, during impeachment proceedings; and with his friend, the president, in 1997.