By 1975 investment banking, like the country and the world, had changed drastically. For one thing, few of Wall Street's recent leaders occupied the positions of authority and influence formerly held by some of the financial district's earlier giants. There appeared to be, observed a Fortune writer in 1973, few "strong personalities" left, people who so dominated their houses that it could be said they constituted the firm. Gordon was such a figure, this author said, one of the very few of them left, with little likelihood there would be others like him. In 1975 investment banking had ceased to be a one-person operation; it had become a "team effort," with scores of specialists using expensive and sophisticated technology, including computers. These were the people who presided over departments previously headed by a partner or two. And the firms themselves, once nearly all partnerships, now are mostly corporations, many of them publicly owned. In 1975 corporations accounted for more than half of all broker-dealers registered with the SEC. Expansion and diversification altered not only the organization and operations of investment firms but their appearance as well. Kidder, Peabody's present location at Hanover Square, the firm's headquarters since March 1972, occupies eleven floors, many of them crowded with advanced technological equipment accomplishing jobs few had considered possible at the time Gordon started on his career in finance.
Not only did Gordon himself accommodate to Wall Street's transformation, but he as much as anyone helped prepare Kidder, Peabody's transition from one era to the other. Aware that no business could survive much less grow and prosper if its fortune remained tied to a single individual, Gordon from the start sought to develop leaders for the future by recruiting and holding on to good people, "individuals," to use his words, "able to lead the firm into the next generation." The informal policy group set up shortly after the 1931 reorganization was used to recognize and reward talent, a process that became more structured after incorporation and the size of the staff had grown strikingly. The addition of numerous experts able to meet the varied and complex needs of the firm's corporate and other institutional clients made Kidder, Peabody an employer of highly trained specialists, not all of whom appeared likely to achieve the status of former partners. In 1975 when the firm's total employees at home and abroad stood at 2,600, only 150 of them were common shareholders in the corporation, the equivalent position of a former partner. An improved retirement plan, expanded benefits, together with Gordon's policy of developing top-level leaders assured Kidder, Peabody the highly trained personnel necessary to operate a large, full service international investment banking house.
The firm's present-day management team headed by DeNunzio is one of the youngest on Wall Street. The age of most of its members ranges between forty and fifty years. All of them have an investment in the firm. "There are no fat cats with high salaries at Kidder, Peabody," DeNunzio stressed. "Compensation comes to us at the end of the year when the books are balanced," a policy that has prevailed since the founding of the house over a century ago.
Kidder, Peabody's record of more than a century of investment banking experience is one of the longest in the history of American finance. Not only has the firm participated in most of the major developments that helped shape the growth and character of the securities business, but very often it stood at the forefront of these changes. From the time of the Thayers in the mid-nineteenth century when railroad finance gave birth to many modem investment banking practices, through the era of great mergers and consolidations at the beginning of the twentieth century, on down through World War I, the boom and bust of the 1920s, the new era of federal regulation in the 1930s, and the spectacular changes of the last quarter-century, the firm has occupied a central and influential position in the nation's capital markets.
The corporations Kidder, Peabody has helped finance over the past 110 years read like a Who's Who in American business. Included among these are the leading companies in every major industry, from some of the earliest railroad, industrial, utility, and communications corporations to the most recent pioneers in electronics and computers.
Kidder, Peabody's record in raising capital for both domestic and foreign governments has been equally impressive. The firm has helped finance many state and city governments, providing them with the funds to build all kinds of public facilities, most recently pollution control and hospital and medical care institutions. In 1976, according to The Daily Bond Buyer, Kidder, Peabody led all other houses both in the number (twenty-five) and dollar value ($609.6 million) of its management or co-management of hospital and medical care offerings. And the firm also has continued to be among the leading sponsors of foreign government and corporate securities.
Many profound changes have occurred in the world since Kidder, Peabody was founded at the end of the Civil War. At that time investment bankers, like most business people, operated almost totally free of any legal restraints. Today investment firms "work in a goldfish bowl," said Amyas Ames, the former chairman of Kidder, Peabody's executive committee. In 1865 the firm's corporate clients were almost entirely railroads and the buyers of its securities chiefly wealthy Bostonians and foreign capitalists. Kidder, Peabody's present-day clientele is not only highly varied but scattered across the United States and throughout the world. The firm has been forced to adapt to many changes in its long history. The fact that it has done so not only accounts for its longevity-from shortly after the onset of the age of steam and rails to the era of the atom and space travel-but also suggests that it will continue to adjust to changing financial conditions and requirements.
