Saul Steinberg (businessman)
Historical photo of Saul Steinberg
|Born||Saul Phillip Steinberg
August 13, 1939
Brooklyn, New York
|Died||December 7, 2012
Manhattan, New York
|Alma mater||The Wharton School|
|Occupation||Founder of Leasco
CEO of Reliance Insurance Company
(1983–2012; his death)
|Children||Jonathan Steinberg (son)
Laura Broumand (daughter)
Nicholas Steinberg (son)
Julian Steinberg (son)
|Relatives||Robert Steinberg (brother)
Roni Sokoloff (sister)
Lynda Jurist (sister)
Saul Phillip Steinberg (August 13, 1939 – December 7, 2012) was an American businessman and financier. He started a computer leasing company (Leasco), which he used in an audacious and successful takeover of the much larger Reliance Insurance Company in 1968. He was best known for his unsuccessful attempts to take over Chemical Bank in 1969 and Walt Disney Productions in 1984.
Steinberg was born to a Jewish family on August 13, 1939, and grew up in Brooklyn, New York the son of Julius and Anne Cohen Steinberg. He has one brother, Robert Steinberg, and two sisters, Roni Sokoloff and Lynda Jurist. Steinberg finished a degree from Wharton School of the University of Pennsylvania in Philadelphia. He was listed as a member of the class of 1959 although some accounts have said that he graduated in two years at age 18.
In 1961, at the age 22, Steinberg founded Leasco Data Processing Equipment Corporation, a computer leasing company that leased IBM computers. While at Wharton, Steinberg had written a paper about IBM Corp., and he had learned that IBM was charging premium prices to lease its computers. Steinberg discovered that he could offer computer leases that would undercut IBM's prices and still obtain bank financing for the entire purchase price of the computers by using the signed leases as collateral with lenders. Leasco grew rapidly, and in 1965 went public.
Leasco bid to acquire Reliance Insurance Company, a Philadelphia insurance company 10 times the size of Leasco. Reliance had been in business 150 years, having been established in 1817 to provide fire insurance. It was managed conservatively. Insurance companies have lots of capital, which is just what computer leasing companies need. Steinberg offered the Reliance shareholders a combination of convertible subordinated debentures and common stock warrants (rather than cash). Reliance management resisted but eventually capitulated, and Leasco was successful in assuming control of Reliance in 1968. Steinberg was age 29 when he took over Reliance.
Steinberg became the CEO of Reliance, and he and his brother were the senior managers of Reliance for the next thirty years. Steinberg took on large amounts of debt during the junk bond era and grew, apparently by underpricing its insurance policies. The company paid out dividends to the shareholders, including the Steinberg family members as major shareholders, and paid Saul Steinberg large sums in compensation.
At Reliance, Steinberg hired dealmaker Henry Silverman, who would later become the CEO of HFS Inc. and later Cendant Corp. In 1986, while Silverman was at Reliance, he and Steinberg were involved with television executive, Jospeph Wallach, in acquiring Spanish language television stations, and creating the Spanish-language media company, Telemundo.
In 1995, Steinberg had a serious stroke. He was forced to step back from management of Reliance. The leverage, low pricing on insurance policies led Reliance to financial problems. Management attempted to sell the company. Reliance Group negotiated a transaction to be sold to Leucadia National in 2000 for stock and the assumption of debt. However, this transaction fell apart in July, 2000.
Reliance filed for bankruptcy in 2001 and entered into a long process of liquidation. Steinberg was forced to sell his extensive art collection along with his 17,000 square-foot, 34-room duplex apartment at 740 Park Avenue in Manhattan, which was bought for $37 million by Stephen A. Schwarzman of the Blackstone Group.
Involvement with Wharton
Steinberg has been a major benefactor of the Wharton School at the University of Pennsylvania. He served as chairman of Wharton's Board of Overseers for over 15 years and continued as a member of the board until his death. The Steinberg name is highly visible at Wharton, most notably attached to Steinberg-Dietrich Hall, which served as the main undergraduate building, containing classrooms, lounges, computer labs, and departmental offices. The Steinberg Conference Center serves as home to the Executive Education Center and the Aresty Institute of Executive Education. Additionally, Steinberg endowed the Saul P. Steinberg Professor of Management chair.
Family and personal life
- Steinberg met his first wife, Barbara Herzog, in high-school, and they would have three children before divorcing in 1974:
- Jonathan ("Jono") married CNBC host Maria Bartiromo in 1999. Jono is the CEO of mutual fund company Wisdom Tree.
- Laura married Loews Hotels executive Jonathan Tisch in 1988; they later divorced. In 2001, she married Stafford Broumand, a plastic surgeon.
- Nicholas owns comic-book stores in Philadelphia.
- Steinberg divorced his first wife after he met Italian American Laura Bordoni Sconocchia Fisher in 1974; Laura converted to Judaism prior to their marriage. They had a son, Julian, before divorcing.
- In 1983, Steinberg married Canadian-born, Gayfryd (McNabb MacLean Johnson) Steinberg, a twice divorced Louisiana businesswoman who once ran her own steel-pipe business. Gayfryd also converted to Judaism prior to their marriage. Steinberg adopted Gayfryd's son from a previous marriage and they also had a daughter together. Gayfryd is a trustee of the New York Public Library.
In 1989 Steinberg hosted an opulent 50th birthday party for himself, that included live models depicting his favorite Renaissance paintings.
Steinberg's brother, Robert or "Bobby" worked as a senior executive at Reliance, helping Steinberg run the company for many years. In 1999, as Reliance encountered severe financial problems, Saul Steinberg fired his brother and the brothers became estranged from one another. In 2000, Steinberg's mother, Anne Steinberg, sued Saul for $5 million that she says he borrowed from her in 1997 and promised to repay on December 1999. She also sued her son Robert for $1.5 million, a debt that also came due in December.
In 2000 Steinberg sold his apartment at 740 Park Avenue in Manhattan to financier Stephen A. Schwarzman of The Blackstone Group for a reported $37 million. The apartment had once belonged to John D. Rockefeller, Jr..
- Collins, Margaret (December 10, 2012). "Saul Steinberg, Corporate Raider, Reliance Chief, Dies at 73". Bloomberg. Retrieved 2012-12-23. Note that this source, and the majority, spell his middle name Phillip, while others spell it Philip.
- Berkman, Johanna. "Fall of the House of Steinberg" New York magazine, June 19, 2000
- "SAUL P. STEINBERG". The New York Times. Retrieved 2012-12-09.
- Silbiger, Steve The Jewish Phenomenon: Seven Keys to the Enduring Wealth of a People p. 79
- Eaton, Leslie. "Sorry, Mother, But Get in Line For Your Money; Suit Says Steinberg Sons Failed to Repay Loans" New York Times, September 9, 2000
- Welles, Chris "Fast Money" New York Magazine, May 12, 1969, "The Fast Money Explosion", available at Google Books
- Funding Universe.com Reliance Group history
- "Insurers Shares Sought by Leasco" NY Times, June 24, 1968
- Forbes Face: Saul Steinberg June 18, 2001, Forbes magazine
- Museum of Television article about Telemundo
- NY Times article May 27, 2000, A Struggling Reliance Group Is Sold and a Corporate Raider Retires
- Insurance Journal article
- Martin, Douglas (December 10, 2012). "Saul P. Steinberg, Bold Corporate Raider, Dies at 73". The New York Times.
- Wharton website list of Board of Overseers
- Wharton website - campus information
- Forbes article His Own Man (Jono Steinberg) Dec. 13, 2007
- Wharton faculty page
- WEDDINGS" "Jonathan Steinberg, Maria Bartiromo" June 13, 1999
- Wisdom Tree website
- "Jonathan Tisch, Executive, to Marry Laura Steinberg". New York Times, May 3, 1987
- New York Times: "Candlelight Wedding Joins 2 Billionaire Families" By GEORGIA DULLEA April 19, 1988
- "Weddings; Laura Tisch, Stafford Broumand" New York Times, October 14, 2001
- People article"Marriage with a Midas Touch", May 7, 1990
- The Fortune Hunters: Dazzling Women and the Men They Married, By Charlotte Hays, pg 37; available on Google Books
- NY Public Library website 2008 Annual Report, pg 58
- People: "Marriage with a Midas Touch" May 7, 1990
- Bloomberg Business Week, December 9, 2010, "A Century of Executive Excess"
- A Blackstone Executive's Other Big Acquisition New York Times, October 8, 2007
- Saul Steinberg, early "corporate raider", dies at 73
- "Anne Steinberg Obituary". New York Times/Legacy.com. December 9, 2012. Retrieved 2012-12-23.
- "Rubens's Classical Spectacle, Rated R", by Ellen Gamerman, Wall Street Journal, January 7–8, 2012, pg C14
- Insurance Journal: Reliance Files For Bankruptcy
- Forbes Face: Saul Steinberg June 18, 2001
- "Fall of the House of Steinberg" New York magazine, June 19, 2000, article by Johanna Berkman
- The Go-Go Years: The Drama and Crashing Finale of Wall Street's Bullish 60s by John Brooks (1999) ISBN 978-0-471-35755-1
- 740 Park: The Story of the World's Richest Apartment Building by Michael Gross, New York: Broadway Books, (2005), ISBN 978-0-7679-1744-5