Donald T. Regan, the man President-elect Ronald Reagan selected to head the Treasury Department, may run the world's largest securities company but on Wall Street both Regan and his firm, Merrill Lynch & Co., are considered mavericks.
"He's not part of Wall Street. He's kept his firm on its own course, one that often conflicts with the desires of most industry officials, and personally he hasn't been involved in Wall Street activities in years," said one Wall Street official.
Regan shares widespread fears of inflation and high interest rates with his fellow executives on Wall Street, but has concentrated on managing and directing the world's biggest financial services firm rather than speaking out regularly on broad economic issues.
Regan, who will be 62 on Dec. 21, heads what is probably the most successful financial services firm in the country, and like the president he has agreed to serve, has done it -- for the most part -- on an 8 a.m. to 5 p.m. schedule. He is an intensely private individual who does not mix family life and work.
When he took over Merrill Lynch, Pierce, Fenner & Smith (now the name of the firm's brokerage subsidiary) in 1971 it already was the biggest brokerage firm in the country. Today he presides over a firm that is far bigger. It has three times the capital and four times the customers of its closest competitor. Its 600 offices are located in 49 states and 24 foreign countries.
But Merrill Lynch is more than a broker. Regan was the first chief executive on Wall Street to understand the unreliability of income from trading stocks and bonds and moved his company out into real estate, insurance and innumerable other financial services. Other brokerage firms resisted, but the diversification trend is now firmly established in the financial community. Merrill also was the first broker to sell shares of itself to the public.
Merrill Lynch today competes head-to-head with banks for deposits across the country. "He can't make loans yet, but he's figured out where things are going. By the end of the 1980s, Merrill Lynch may be the biggest bank in the country, too," said the head of a major competing brokerage firm.
Merrill Lynch and bankers have clashed in recent years over where the proper division lies between the banking and brokerage industries, both of which are in business to manage customer money. While Regan pushed his company into areas traditionally reserved to banks, the other leading candidate for the Treasury post, Walter Wriston, was pushing his Citibank into fields brokerage houses guarded carefully.
Regan is "an extraordinarily talented individual, a man with a tremendous amount of vision," said James Balog, senior executive vice president of the brokerage firm Drexel Burnham Lambert Inc.
He will take a pay cut at Treasury. Last year Regan earned $277,960 at Merrill Lynch plus a cash incentive aware of $225,000. As secretary of the Treasury he will take home $69,630.
The ex-Marine spends nearly every weekend at his estate in Mount Vernon overlooking the Potomac. He purchased the Washington-area residence several years ago to be close to his four children, all of whom are grown.
Regan is a polished speaker, well-accustomed to testifying before Congress and dealing with the media. To the public he projects a cool, placid exterior. But both competitors and associates attest that Regan at work is a tough, no-nonsense executive who barks orders and expects action.
"They talk about Bill Simon" -- once thought to be Reagan's top candidate for the Treasury post -- "as being too abrasive. Well, Don Regan didn't go to charm school," said an official at a competing brokerage firm. "He's used to ordering people, then having things happen. He might find government frustrating."
Regan began his career at Merrill Lynch in Washington in 1946 as what the industry calls an account executive and most everyone else calls a broker. He went to Philadelphia, then to Merrill Lynch headquarters in downtown Manhattan. In the late 1960s he convinced management to let him develop a long-range plan for the company. That plan vaulted him to the firm's top position in 1971.
He served as vice chairman of the New York Stock Exchange from 1972 until 1975, but even then chafed at some of the positions the exchange took in opposition to change in the securities industry. He pushed for an end to fixed commissions on stock trades when almost every other Wall Street executive fought the Securities and Exchange Commission on the issue. Fixed commissions ended on May 1, 1975.
While the exchange today is resisting attempts by the SEC to end the exclusive (and profitable) trading of stocks on a particular exchange, Regan's Merrill Lynch has pushed hard for a so-called "national market" in securities and is running its own experiments that bypass the floor of the New York exchange.
Merrill Lynch warned that the industry was not equipped to deal with daily volume on the New York exchange of 100 to 150 million shares, and the firm built up its computerized processing system to be ready for that day. Average volume on the NYSE was less than 30 million a day two years ago. Twice this year more than 80 million shares have been traded, and 60-million days are common.
"He's not a traditionalist. He's intelligent, imaginative and aggressive and has been a leader in getting his firm into new areas and new ideas," said William M. Batten, chairman of the New York Stock Exchange.
Regan was educated at Harvard, studying economics and English, and is a voracious reader, associates say. Although his passion is history, Regan reads four or five newspapers a day during his limousine ride to Manhattan from his weekday home in Colt's Neck, N.J. He is an accomplished golfer who enjoys a low-stake bet on the game (something golfers call $1 Nassau), and is insistent, even in friendly matches, that rules be followed to the letter. He serves on a Professional Golf Association rules committee.