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and then consume it. One of their first tasks was to reduce overhead. But they weren't

going to have Lehman's bonus pool reduced in the process. One senior employee recalls a

meeting convened to restructure the overall bonus pool, already tilted heavily toward

Lehman's side.

The man representing Amex was in charge of the retail business, Jonathan S. Linen.

Opposing him were Hill, Fuld, and Pettit.

Fuld remained quiet for most of the negotiation, allowing Pettit and Hill to divide and

conquer. "They sort of sliced [Linen] up," says someone in the room. John Cecil, the

McKinsey consultant hired in 1990, recalled that Pettit and Hill "came out of the meeting

with the bonuses skewed [in their favor] even more than before."

The trio was always looking for ways to subvert their putative masters. Their job was

made easier, says one senior Lehman executive from that era, because "H" Clark was

seen as easy to manipulate. "There was a joke that he was called 'H,' unlike his father,

who was called ' Howard,' because he had one-sixth of his father's brains," said one

former senior Lehman leader.

"H" conducted the search for Lehman's CFO on his own. It took several months, and

when he finally sent down a potential candidate, Richard B. Stewart Jr., Cecil thought he

was weak and told Clark so. Clark seemed surprised. "But Dick and Tom love him," he

said.

Cecil says he went to see the Lehman co-heads and told them he thought Stewart was

weak.

"Of course he is," Cecil says that Hill responded. "We want to control him." (Hill says

this never happened.)

Hill and Pettit were clearly the leaders of the transformation of Lehman from 1990 to

1994. "Dick didn't have that much of a role," says a former colleague. "That was Chris.

Except for banking--Tom, even when he was co-head, really was the head of banking.

And so, as long as they were there, there wasn't much for Fuld to do.

"And he was certainly not very visible to the organization. The bankers wouldn't see him

going out to see banking clients. Nobody in the organization would see Dick running

things."

When they did see Fuld working, he didn't exactly dazzle.

One person recalls a meeting at the Plaza Hotel in Manhattan, in which Clark had asked

Fuld and the other senior managers to stand up for a few minutes and describe their

respective parts of the business.

"Dick stood up there, and it was the most awkward meeting I 've ever seen in my life.

He'd say a sentence--[long pause]--and then he'd say--[long pause]--a sentence and then

he'd say--[long pause]--a word. It was unbelievable."

Around that time, Jim Vinci was asked to help Fuld with his speech for the year-end

meeting at New York's American Museum of Natural History. Vinci gave him a draft of

the speech, and Fuld went through it and began inserting the word clearly every chance

he could get. According to a source who was present for the conversation between the

two men, Vinci said, "Dick, you can't say 'clearly' that often. As a matter of fact, you

can't say it at all." Vinci finally closed the door to Fuld's office and said, "Look, you need

a coach. You need someone to help you."

Fuld took Vinci's advice. He attended courses at Dale Carnegie Training, a training center

founded by the author of How to Win Friends and Influence People to assist in "bringing

out the best" in business leaders.

He never forgot Vinci's help. Many years later, in October 2007, Lehman Brothers had an

alumni cocktails event at the Four Seasons restaurant in midtown Manhattan. Fuld began

by giving a speech, and later, in front of four or five former managing directors, put his

arm around Vinci and said, "Gentlemen, I want to introduce you to the first person who

told me no, that I can't do something."

Vinci says he smiled, and thought to himself, "Yeah, and probably the last."

While Fuld worked on his public speaking skills, it was becoming clearer and clearer to

many that Jim Robinson wanted out of the banking business. Word went around the

Lehman offices