In November, other battles debilitated the partnership. On November 8, Glucksman formally told the six other members of the operating committee that he intended to appoint Robert Rubin president. This was not a new idea to Glucksman. He had planned it around the time he confronted Peterson in July. That fall Glucksman had sounded out a few senior partners about it. It is unclear whether those he approached were genuinely enthusiastic, in which case he was talking to too few partners, or whether those he approached were too timid to share their true opinions. What is clear is that Glucksman was as oblivious to the anger this move would arouse as Peterson had been to the fury smoldering within Lew Glucksman.

When Glucksman told the operating committee of his decision, he immediately encountered some resistance. Three committee members—Roger Altman, François de Saint Phalle and Shel Gordon—told him they were troubled by the way he had anointed Rubin. “Roger, Shel and I felt there hadn’t been a formal process to decide how to choose the next president,” says de Saint Phalle. Glucksman countered by saying that he wanted a united operating committee to recommend Rubin to the board, which was scheduled to meet on November 10. Although they did not then share with Glucksman their substantive concerns about Rubin’s managerial abilities, like many partners the three men worried about Rubin’s leadership skills, about whether he was too much like Glucksman, a Mr. Inside. No one questioned Rubin’s brainpower, his ability to size up a financial deal or spot risks. He was, by most accounts, the most brilliant banker at Lehman, but he was a private, prickly personality.

With Glucksman the three confined their objections to procedure, not substance. Gordon wanted to give the board more time to deliberate and, some said, to maneuver for the position himself. Altman and de Saint Phalle agreed that more time was needed, and emphasized an additional concern: They did not want to take responsibility for recommending a president unless they had the authority to vote for a president. Since they were not members of the board, they said this authority was denied them. For months, members of the operating committee had complained that they should also sit as members of the board. They were already meeting twice weekly to ponder major operational and strategic decisions. Of the seven members, only three—Altman, de Saint Phalle and administrative partner James Boshart—were not board members.

Glucksman asked Altman, Gordon and de Saint Phalle to meet privately with Rubin to ventilate these concerns. They met the next day in Rubin’s small office on the forty-first floor. The taciturn Rubin sat there, quietly drawing on one of his long, thin Schimmelpenninck cigars, and listened as his three partners told him they questioned the process Glucksman had followed in arriving at this decision.

“Fine. I’m not a candidate for this position,” Rubin remembers saying. “I have no burning desire for this job. I’m willing to do it. If more than one person on the board votes against me, I won’t take the job and I’ll decide what I have to do.” The operating committee delegation took this as a threat.

That night, on the eve of the board meeting, the committee was summoned to a meeting. Glucksman knew he had the votes to make Rubin president. He had met alone with Shel Gordon and came away satisfied that he had a committment from Shel for Rubin. In an act Glucksman thought would be perceived as ecumenical, he announced that he wanted to nominate de Saint Phalle and Altman to the board. He also planned, he announced, to nominate Jim Boshart and Henry Breck. Glucksman said it was good management for members of the operating committee to serve on the board, which set broad policy. Since Breck was responsible for managing one of the three major divisions of the firm, Glucksman said he belonged on the board as well. Some members of the committee interpreted Glucksman’s action as a bribe. “Lew bought us off by putting us on the board,” one of the four men shamefully admits.

For three hours the next morning, November 10, the four waited outside the boardroom on the forty-third floor, sipping coffee, pacing, making phone calls. Inside, the board argued, often vehemently, about the merits of expanding, about the demerits of the four candidates, about whether new board members should be permitted to vote for president. Solomon, as usual, led the charge, comparing Glucksman’s proposal to Franklin Delano Roosevelt’s scheme to pack the Supreme Court. He got a silent nod of approval from a Rubin ally, Bill Morris, who was a strict traditionalist. Morris later told friends he believed Glucksman was in fact trying to “pack the board.”

Analogies with FDR were not the fulcrum of this debate, however. The focus was on personalities and on balancing internal interests. There was no opposition to adding Breck or Boshart, says Glucksman. But there was intense resistance to adding Altman, who as head of new business development was thought not to have the internal clout and to be “too political”; there was lesser but real resistance to de Saint Phalle, since he, like Altman, no longer headed the banking department. Resistance to de Saint Phalle evaporated relatively quickly; to gain support for Altman, Glucksman recalls importuning the board: “I never thought of Roger Altman as my man. But I always thought we needed a new business program. He did a good job at it. It’s vital that you support your chairman. It’s vital to have in this body someone who represents the new direction we’re talking about—the development of new products and new accounts.”

The other major debate, recalls senior banker Harvey Krueger, was “an argument about balance—bankers versus nonbankers, managers versus nonmanagers. And someone had to say something about each person.” Even though three of the four candidates had their roots in the banking department, bankers on the board were either so paranoid or so preoccupied with maintaining their own status within the firm that they once again felt their power was being diluted.

The meeting went on so long that Glucksman had to cancel a previously scheduled luncheon with the editors of Newsweek magazine.* Finally, after three hours, a compromise was reached: the four new members were approved; and the bankers on the board were appeased by the addition of a fifth member—Richard Bingham, then forty-seven, the head of the M. & A. department, who, it would soon be announced, was going to run Lehman’s San Francisco corporate finance office. Bingham was nominated by banker William Morris, and encountered no opposition. “I didn’t know Bingham well. But I knew he was a professional,” says Glucksman.

“For at least ten minutes peace reigned,” says Glucksman. The five new board members filed into the meeting. Everyone knew what Glucksman proposed to do this day, and now he did it. He nominated Rubin as a candidate for president. But before Rubin could speak, Peter Solomon had something to say. Tension filled the boardroom, for as one board member says, “Solomon and Glucksman hate each other with enough electricity to light half the United States.” And the hatred between Solomon and Rubin might light the rest.

Pausing for effect, Solomon turned to Rubin and asked, “What are the talents you have to be president of the firm?”

Rubin answered the question head-on, between puffs of his Schimmelpenninck. “I made it clear to the board,” recalls Rubin, “that I am a private person. I do not like meeting new people. I probably don’t like the normal social amenities that people from all walks of life like. I don’t go out for three-hour dinners. I’m not going to change.” He didn’t have to, he said, because “Lew is not like that. He acted like that while Pete was chairman, because Pete was the consummate outside person. If only you would look at Lew’s diary from last July to now, you’d see what functions he went to, what clients he visited. I think you’d see by the record that he was happy, and doing well as an ‘outside person.’” Rubin told the partners he believed Lehman’s capital was adequate, and flatly stated his opposition to going public or to selling all or part of Lehman Brothers. He also promised that Lehman would be more open, and embraced Glucksman’s plan to inaugurate regular Monday board luncheons.

Still, Bob Rubin was not a man to grovel. He wanted to satisfy his partners, but he did not see himself as a seeker of this office; he was responding to a request from his friend Lew Glucksman. He said he wanted the job and was qualified to hold it. He repeated what he had said the day before about how he would decline the job if the vote was not nearly unanimous.* Rubin simply concluded his remarks by expressing the belief that he could do a good job.

“You are the only one who feels that way,” shot back Solomon, who was incensed at Rubin’s remarks. He believed that Rubin was dead wrong about the adequacy of the firm’s capital, and thought he was obstinately and wrongly opposed to taking the firm public or bringing in a minority investor to shore up Lehman’s capital base (and, not incidentally, provide partners with a considerable amount of cash, while diluting Glucksman and Rubin’s power base).

Rubin left the room to allow the board to deliberate. Those, like Glucksman, Morris, Boshart, Fuld and Breck, who believed Rubin was the most intellectually impressive banker they knew, a man of principle and character, were pleased by his presentation. But many were astonished. Did Rubin, and for that matter Glucksman, really believe Glucksman could be Mr. Outside, like Peterson? How could Rubin believe Lehman had adequate capital? Was Lehman electing a president or a hermit? Would he be a hands-on manager, more open than he had been in the past? Why would a private man, who said he did not seek the job, subject himself to such public abuse?

Such were the private reservations of many board members, but only Peter Solomon uttered his misgivings publicly. Seizing center stage, Solomon fulminated against Rubin. At one point he recalls saying, “Rubin is qualified. But he doesn’t complement you, Lew. He’s an inside guy. Why not leave the spot open so a Shel Gordon or a Dick Fuld can think they can be president?”

“Because I want him,” snapped Glucksman, his Russian general’s face reddening.

Harvey Krueger, the genial fifty-four-year-old chairman of the audit committee, spoke next. Of all his partners, Bob Rubin was the only one Krueger could not get along with. He had disliked Rubin from the first, feeling he was negative about the Kuhn Loeb merger and much else. In his avuncular way, Krueger asked whether Rubin’s talents complemented Glucksman’s. With Peterson gone, he wondered, did Lehman need a salesman, a visible rainmaker? Bill Welsh, as usual, said nothing. Mario M. Arcari, president of the Long Island Trust Company, who was representing BCI and Enrico Braggiotti as an observer, also said nothing.

But Shel Gordon stunned Glucksman by saying that a decision should be delayed to allow more time to make a considered management judgment. Glucksman glared at Gordon. For the first time, Glucksman sensed that Gordon, his handpicked choice to head banking, was no longer his agent. “The real break with Shel began when he backed down on voting for Rubin,” recalls Glucksman. “He wanted to delay. He was trying to marshal support for himself.”

Glucksman summarily dismissed Gordon’s effort to stall a vote. Joining Glucksman in advancing Rubin’s candidacy were William Morris, Richard Fuld, Henry Breck and James Boshart. To them, Rubin was a counterweight to Glucksman, a man who stood up to Lew and could slow him down, a man who made them feel secure. They personally admired Rubin. To most trading partners and associates, Rubin was perceived as the one person whose roots were in banking but who, nevertheless, understood their grievances. Among this group of employees, few admired Rubin more than Jim Boshart. “Bob Rubin is the most unfairly maligned person in this organization,” Boshart recalls saying. “He is the single person I met here in fourteen and a half years that I respect the most. He is the most intelligent person I have met here. He is the most decent person I have met here. Bob Rubin is always concerned with the pay of all employees here, not just the best-paid employees. I’m astonished by the negative comments made about Bob. When many of us started with the firm, Bob Rubin was the person many of us aspired to be.”

The other new board members had said little, so Harvey Krueger solicited their opinion, inviting them to speak. They wobbled, like yearlings. Bingham asked who would be responsible for controlling costs. (Rubin, answered Glucksman.) De Saint Phalle opined that the main objective of the president should be to instill confidence and to facilitate communication, and he wondered whether Rubin would communicate. Altman spoke, somewhat vaguely, of the need to fashion future procedures to identify and select top managers. Breck unhesitatingly defended Rubin, the partner who first hired him at Lehman.

The arguments flared for an hour and a half, with people sometimes repeating themselves. Then Glucksman, impatient for a decision, started to poll the partners. The tide turned when he called on Harvey Krueger, who said, “You’re entitled to pick your own chief operating officer.” Others chimed their agreement. Krueger moved for the unanimous confirmation of Rubin as president. Peter Solomon shrugged and went along. The vote was unanimous.

The reaction inside the firm was hardly unanimous. “It did not make good management sense,” says James Hood, the former head of marketing and public relations, who is today director of marketing at First Boston. “You heard all the jokes about Mr. Inside and Mr. Inside. Deserved or not, there was a great concern that with Peterson gone, Lew was not willing to assume the mantle of Mr. Outside. That is an accurate criticism. There appeared to be either a total lack of awareness or sensitivity to how people felt. Like Lew, Bob was a guy who had little client contact. Perhaps he made a substantial contribution to the firm, but those he made were very much inside. We plugged into the president’s slot a man who never indicated an interest in management. Who spent time sitting in his own office doing things no one understood. People didn’t know what Bob Rubin did. He was resistant to new business and marketing. If you have those personal beliefs and biases, how can you be president?”

*The luncheon idea was triggered by Richard Holbrooke, who had invited a friend, Newsweek editor Maynard Parker, to dine at Lehman with visiting Chinese officials. At this dinner, Glucksman, who was upset by a recent Newsweek story, “The Lehman Circus,” suggested the lunch. It was canceled, then rescheduled and held at Lehman Brothers. According to William Broyles, former Newsweek editor-in-chief, the article that provoked the invitation was never discussed.

*Memories differ on whether Rubin issued a threat or merely said the next president would need broad board support to function properly.