4

TIAA-CREF

In October of 1989 I became the chief financial officer of the $76 billion education pension and insurance system for TIAA-CREF, the largest private pension system in the country. Clif Wharton brought me on to help expand its programs and investment options for its 1 million policy holders. I was the first black person to fill the CFO role in the organization’s seventy-one-year history.

My primary focus in the first few years at TIAA-CREF was the challenge of defending the company’s investment allocation policy against possible cashing out by frightened customers. The U.S. economy was sliding into a severe recession, which triggered significant deterioration in the performance of commercial mortgage and real estate assets and below-investment-grade corporate bonds. TIAA had heavy exposure to those classes of assets, and was often listed prominently near the top of financial media news stories discussing which companies were most at risk for impaired assets. There was also criticism of TIAA investment policies among the academic economists in our college and university customer base. These atmospherics combined to create an undercurrent of serious concern and uneasiness in the company. TIAA was primarily a fixed-income investment account promising guaranteed principal and competitive current investment yields, with a guaranteed minimum 3 percent interest rate on customer balances. Much of the TIAA portfolio was invested in corporate private placement bonds, mortgage loans, and real estate. TIAA had achieved investment returns superior to competitors’ over the years through a combination of astute investment underwriting and greater allocation to relatively illiquid and longer-maturity investments. Bond maturities of one to five years, for example, constituted over 20 percent of average life insurance company bond portfolios but less than 1 percent at TIAA. Mortgages with maturities of one to five years made up nearly 30 percent of average life insurance company mortgage portfolios, but again less than 1 percent at TIAA. Conversely, TIAA had much heavier asset allocations to longer-maturity corporate bonds and commercial mortgages, and equity real estate. TIAA also had substantial exposure to corporate private placement bonds, which were not publicly traded and were very illiquid. In essence, TIAA was taking more investment risk, and being well compensated for that risk.

TIAA could adopt this investment policy because there were significant restrictions on customers’ ability to withdraw funds prior to retirement. After being successful for many years, the strategy came under severe challenge in 1990–1992 as the U.S. recession focused a spotlight on financial institutions’ exposure to higher-risk assets. TIAA investment professionals were generally first-rate, and their investment underwriting was holding up under the severe stress, but TIAA needed to defuse customer concerns before they morphed into panicky demands for greater withdrawal rights. The many “pension millionaires” among the American professorate were champing at the bit to get at their money. If TIAA was forced to sell investment assets in that recessionary environment, it would incur substantial capital losses.

I proposed that the company seek financial strength ratings from Moody’s, Standard & Poor’s and A. M. Best, which were the major insurance company rating agencies in the U.S. capital markets. I had been responsible for rating agency relationships at John Hancock, and I was confident of my ability to present TIAA’s asset-liability structure in a way that would garner strong ratings. TIAA had not been rated previously, and many company executives thought it was a risky strategy—great if it works, but a potential disaster if the company receives a mediocre rating or worse.

Usually companies that issue large amounts of debt into the public markets are the ones that seek credit ratings. Rating agencies perform in-depth analysis and give their expert opinions on the companies’ creditworthiness and ability to pay, especially under adverse stress scenarios. Because insurance companies’ long-term financial obligations to policyholders were analogous to long-term debt, rating agencies issued what were called “insurer financial strength” ratings. Dr. Wharton and the board supported my proposal and we engaged with the rating agencies.

I organized extensive preparatory sessions and rehearsals because very few TIAA executives had experience dealing with rating agencies. Even the investment staff, while experienced users of rating agency analytics when underwriting other companies as prospective investments, had little feel for presenting to rating agencies to secure a rating. I laid out the “TIAA story” for each line of business and investment team, and the presentations and supporting materials were polished to a high level as I probed deeply and asked tough questions in our preparatory sessions.

Each major rating agency sent its strongest insurance industry team to the TIAA rating meetings, held in one of our large conference rooms, because TIAA was a major financial institution and clearly had substantial investment portfolio risk characteristics similar to those that had already triggered ratings downgrades of many banks and insurance companies.

For each day-long rating meeting, the rating agency would send four executives—its senior people in insurance industry ratings and commercial credit analysis, mortgage credit analysis, and private placement bond analysis—as well as a senior actuary.

I opened the meetings with a fifteen-minute overview, followed by one-hour slots for each of our major business lines and investment groups—Pension and Annuity Services, Insurance Services, TIAA Mortgage and Real Estate Investments, TIAA Private Placements, Bond Investments, and TIAA Actuarial—to make a twenty-minute presentation, followed by forty minutes of questions and answers.

I knew the people on each rating agency team from dealing with them at John Hancock, and I had correctly anticipated their concerns by reading their reports on other companies, issued during the then widespread downgrading of insurance companies’ financial strength ratings.

Dick Gibbs, a vice president and controller who reported to me and served as my right-hand man from my arrival at TIAA-CREF to my departure, put our materials together for the ratings meetings. He’d been with TIAA since joining the actuarial division in 1969 and had steadily earned promotions since, being named a VP in 1981. He was a straight-talking, hardworking guy from Long Island, a graduate of Lehigh with an advanced degree in actuarial science from the University of Michigan. We hit it off from the start and soon were regular golf partners as well as close work colleagues.

The toughest of all the rating agencies was Moody’s. The morning of that meeting, we sat on one side of the long conference table and the Moody’s team sat facing us. Ken Pinkus, who headed the Moody’s group, was a hard-nosed guy. Dick later described him as “persnickety.” It soon became obvious that Pinkus was inclined to give us only the second-highest rating, since 50 percent of our investments were in mortgages. I knew this was the time to make a strong argument and not back down. We had the facts on our side and had prepared the evidence carefully. A heated exchange ensued between Pinkus and me, and I stood my ground and pushed home our strong points: I identified and described critical strengths that differentiated TIAA from other insurance companies and banks. I pressed Moody’s to adhere to fact-based evaluation and decisions.

The results of our preparation were outstanding. Several weeks after our last rating interview in October, I got the first telephone call with the good news. More calls followed. TIAA had received the highest possible “triple A” financial strength rating from each agency, becoming one of only five insurance companies with that distinction. This success elevated me to superstar status in the company, and Clif Wharton looked prescient for recruiting me.

After the ratings decisions were announced that fall, I commenced a tour of the TIAA-CREF branch offices in Philadelphia, Boston, Denver, Chicago, Detroit, Atlanta, Washington, Dallas, San Francisco, and New York to explain the ratings to our institutional and individual client counselors. I also discussed the best responses to the toughest questions they were receiving from our clients. My tour was so well received that I repeated it each year, and in 1992 added visits to our major institutional clients, including the University of Michigan, the University of Minnesota, Johns Hopkins, Howard University, Duke, Vanderbilt, Emory, the University of Arkansas, Georgetown, Fordham, New York University, Spelman College, Tuskegee, and Wake Forest.

My second area of focus in the first two years was improved financial reporting to senior management and the board. I prided myself on bringing clarity to financial reporting for each line of business and each investment strategy. I believed that true depth of understanding enabled one to present complex and difficult information in ways that could be surprisingly clear and understandable. I thought of this as similar to the knack the best educators have for presenting complex course material in ways that simplify and clarify it to facilitate student comprehension. Improved financial reporting was intended to empower senior management and the board through increased transparency which facilitated deeper understanding of our business and investment operations, enabling them to ask more probing and insightful questions. Clarity in financial reporting is the key to risk management in complex financial institutions. Obfuscation and complexity often suggest that senior management and the board do not truly understand and control company financial risks. Improved financial reporting contributed to positive energy and tension at TIAA-CREF because penetrating and insightful questions from senior management and the board spurred the operating and investment executives to stay alert and on their toes and to be better prepared to explain what they were doing.

I have been asked what my secret has been throughout my career, and in addition to the personal discipline and hard work I’ve emphasized in this book, the other main attribute that has contributed to my upward rise is my ability to boil complex problems down to their critical elements. The resulting clarity facilitates well-informed and improved decision making.

My third area of focus at TIAA was incentive compensation. It was important to create compensation programs that rewarded executives for creating value for our clients, and for achieving important financial and strategic objectives. TIAA-CREF needed to attract and retain superior professional talent, and improved financial reporting increased the confidence of the board that we could actually identify and weigh important performance metrics. Consequently, the board was supportive of senior management proposals for significant enhancements in incentive compensation tied to critical performance measures.

In his autobiography Privilege and Prejudice: The Life of a Black Pioneer, Dr. Wharton wrote about me:

Wharton also wrote about the succession planning process at TIAA-CREF:

In January 1993, on the heels of Bill Clinton’s inauguration as president, Dr. Wharton announced that he was accepting an appointment as deputy secretary of state in the Clinton administration. TIAA-CREF then announced that John Biggs would succeed Wharton as chairman and CEO, and I would succeed Biggs as president and chief operating officer, effective January 26, 1993. Prior to joining TIAA-CREF as president in February 1989, Biggs was chairman, president, and CEO of Centerre Trust Company of St. Louis, and from 1977 to 1985 he was vice chancellor of finance and administration at Washington University in St. Louis (which was a signifi-cant TIAA-CREF client). Biggs had been a CREF board member since 1983 and was fifty-six years old. He and I had a friendly relationship, and we both participated regularly in tennis and golf with other TIAA-CREF executives. I felt fortunate to achieve this significant career success, and I felt a large measure of gratitude toward two of my direct reports in particular for the support they had given me as CFO—Dick Gibbs and Richard Adamski.

I was welcomed into the TIAA-CREF presidency with an immediate baptism by fire. The Wall Street Journal published an article about me on February 9, 1993, titled “The Ironic Life of a Controversial Cornellian.” The article provided a superficial summary of the Willard Straight takeover and the part I played, focusing on the harshness of my oratory that week in 1969, the professors who had left Cornell in protest after the takeover, and the fact that I had since distanced myself from the kind of militancy that had led us to the occupation. The reporter also quoted me speaking about my hope to open a school for New York City boys “in need of surrogate parenting,” and ended with the point that gave the article its title: “Mr. Jones will soon be able to shape Cornell policy again. In the latest of ironies, he is to become a trustee of his alma mater this summer.”

I was surprised by the attention the article attracted. Clearly, every person at TIAA-CREF, and very many outside the company, had read it. By email, phone, and mail, congratulatory messages poured in for me, especially from African Americans. Nonetheless, some members of the senior management ranks expressed concern that the story might cause damage to client relationships among our predominantly college and university clientele. At TIAACREF board meetings, I could see doubt in the eyes of some board members who had not been aware of my background before reading the article. I felt, for a moment, that I was back in 1969—vulnerable, a target of conservatives’ hostility toward any career success I might have or attain. And it would probably be like this for the duration of my career, I felt. Never, I vowed, would I give Allan Bloom or Walter Berns or other right-wing conservatives the satisfaction of pressuring me into repudiating what we black students had done at Cornell in 1969. I determined to walk a fine line—never disavowing what I had done at Cornell, but also never explicitly endorsing the threat of violence. My most effective response and best defense would be the one I’d always turned to: a commitment to professional excellence.

One good thing that resulted from this Wall Street Journal article was that I was contacted by Laurel Senger, principal of St. Aloysius School in central Harlem. She wanted to tell me about her school. St. Aloysius enrolled 180 students, 96 percent African American and 4 percent Latino or Asian. She had created the “Gonzaga Program” for sixth-, seventh-, and eighth-grade boys, emphasizing leadership skills, development of personal relationships, and academic achievement. Gonzaga instilled responsibility and accountability through small class size, regular group dynamics sessions, and individual counseling. The school’s all-male faculty offered a challenging curriculum to prepare students for admission into competitive high schools. Classical literature, African American history, oratory contests, and museum visits were elements of the cultural enrichment program. Most of her middle school graduates succeeded in gaining admission to competitive-exam high schools, most of them graduated on schedule from high school, and most attended college.

Ms. Senger invited me to visit St. Aloysius, and I was so impressed with what I’d heard about the school that I accepted the invitation. After giving me a tour, she asked if I was serious about trying to help low-income inner-city schoolchildren. I told her I was. And so instead of trying to start something brand-new, I took the opportunity to work with her instead.

St. Aloysius students were confident. I could see it in the way they walked down the hallways and in the way they spoke in class, deeply engaged with the material, sure of their ability to discuss topics at a high level, to ask questions. I saw in the students the self-confidence and self-esteem that are critical for personal success. And I saw respect for others and positive social interactions, which are critical for social success. They were proud of their school, too. I was impressed with them and with Ms. Senger’s educational track record.

As an adviser and donor to the school, I initiated a program called Courage to Succeed, which entailed three components: (1) TIAA-CREF donations of desktop computers to St. Aloysius and tutoring sessions by TIAA-CREF information systems specialists to teach computing skills; (2) fund-raising leadership by TIAA-CREF, which sponsored an annual awards and recognition dinner that raised several hundred thousand dollars each year to support scholarships for students who could not pay the tuition; and (3) classroom visits by successful minority executives whom I recruited to discuss their journeys to success in order to help Gonzaga boys visualize paths that were not part of their life experiences, and to encourage them to think that they could do the same things. I chose the title Courage to Succeed to reflect the need to confront ghetto peer group pathology, which often mocks and belittles academic high-achievers (another version of “not black enough” psychological intimidation).

In 1995 Laurel Senger sent us a short personal note:

In 2003 Addie and I were the honorees at the St. Aloysius School’s eleventh annual scholarship benefit cabaret. The invitation read “This year’s scholarship dinner will honor Thomas and Adelaide Jones for their enduring commitment to the education of inner city children.” It was a heartwarming event where we got to reflect, with the school and the students and many graduates, on all that the Courage to Succeed program had made possible in so many young men’s lives.

My primary responsibility as president and chief operating officer at TIAA-CREF was to conduct the quarterly reviews focused on performance against financial and qualitative objectives for business units, investment units, and staff accountability areas. A second responsibility was to chair the Service Council, a newly created group charged with coordinating customer service improvements across business units and staff accountability areas. My third major responsibility was participation in the various investment committees that formulated and oversaw implementation of TIAACREF investment policies. These included the CREF Investment Committee for our publicly traded stocks in U.S. and international markets, the TIAA Mortgage and Real Estate Committee for our commercial mortgage and real estate investments, and the TIAA Finance Committee for our publicly traded and private placement bonds. In addition, I also continued to lead the annual financial strength review processes with the external ratings agencies.

CEO John Biggs and I were an effective team, and TIAA-CREF did well under our leadership. Biggs and I had a good personal relationship, and we regularly played tennis and golf together. Our only significant difference of opinion about company policies arose in 1996, when Biggs began to push his ideas to introduce a family of low-cost indexed mutual funds to attract non-pension personal savings of our individual clients, and to move TIAA-CREF back-office operations out of New York to reduce operating and compensation expenses. Biggs was an ardent admirer of John Bogle and the Vanguard Funds’ low-cost index investment philosophy, and this greatly influenced his thinking. I agreed with the core objectives of Biggs’s ideas, but I differed with him on some aspects of implementation. For example, I thought we should invest resources to market the new mutual funds to our clients in order to build sufficient scale more quickly. Second, I thought we should take another page from the Vanguard playbook and use TIAACREF’s distribution power to attract talented boutique investment teams for sub-advisory management contracts for actively managed investment funds. My goal was to deepen our customer value proposition by offering customers a way to access unique investment talent that TIAA-CREF might not be able to hire as employees. Third, I was skeptical that we could sustain the most important elements of our unique company culture under a geographic configuration in which most employees were in remote locations away from New York, while senior management and the investment organization remained in Manhattan.

The June 1994 issue of Black Enterprise contained an in-depth profile of me written by Caroline Clarke Graves titled “#2 at the World’s Largest Retirement Fund,” which quoted Mark Wright, one of my colleagues at TIAA-CREF:

Teamwork, getting the best out of people, and infusing our employees at TIAA-CREF with a sense of purpose and pride about our company were my areas of focus as I led the company’s customer service improvement initiatives. Biggs and I created a new Service Council early in 1993, shortly after we’d risen to our new leadership roles, and I chaired its first meeting in March. Not only did I bring in the executive vice presidents from each of our customer-facing divisions of the business, but also I made it a point to include managers with responsibility for front-line service. If these were the men and women wrestling with day-to-day service issues, I wanted their insight and ideas at the table. One of the council’s main goals was to reshape the service infrastructure at TIAA-CREF, which entailed benchmarking our service performance against that of our peers in the industry and introducing non-trivial reforms that had a large impact on the company’s way of doing things and levels of success. The October 1996 issue of Topics, TIAA-CREF’s employee magazine, included the following it its cover story on our council and its achievements:

While our customer transactions had been growing in excess of 15 percent annually between 1992 and 1996, the staff responsible for handling those transactions had grown only between 2 and 4 percent per year, and yet they were able to do the work well (in fact, better than before) because of the new efficiencies we’d put into place.

As the largest private pension system in the United States, TIAA-CREF enjoyed enormous credibility and an outstanding reputation with regard to the sound management of pension issues. My success at TIAA-CREF brought me to the attention of the Clinton administration, and I accepted President Bill Clinton’s invitation to serve as a public member of the 1994 Social Security Advisory Council (SSAC). At that time, a provision of the Social Security Act required an advisory council every four years to review the status of the Social Security trust funds and their relationship to the program’s long-term commitments. The 1994 council, which worked until 1996, focused on three subjects:

1. Social Security financing, including the long-range financial status of the Old-Age, Survivors and Disability Insurance (OASDI) programs.
2. Adequacy and equity of Social Security benefits paid to persons of various income levels, family situations, and age groups.
3. The relative roles of the public and private sectors in providing retirement income, and how policies in both sectors affect the retirement decisions and economic well-being of individual workers.

There was a strong push by conservatives in the late 1980s and early 1990s to allow employees to divert some or all of their individual Social Security payroll taxes into “private accounts” owned individually, and invested in an array of investment options similar to defined contribution 401(k) pensions or individual retirement annuity (IRA) accounts. The theory was that the current system places payroll taxes into the Social Security trust fund, but that since the fund is merely a government accounting fiction—because no “trust fund” with underlying invested assets actually exists—these balances are simply unsecured general obligation liabilities of the U.S. government, equivalent to government treasury bond debt. If an investment account holding underlying assets were actually owned by each individual, then the individual would in theory have the opportunity to earn a higher investment return than the treasury bond rate currently credited on Social Security trust fund balances, and the individual accounts could become part of an individual’s estate. This “private account” approach, known as “Social Security privatization,” was first suggested during Ronald Reagan’s presidency in the 1980s. In 1995 I was invited to discuss these issues with Congressman Charles Rangel, chairman of the House Ways and Means Committee, a Democrat representing New York and one of the longest-serving members of Congress, and Senator Charles Grassley, chairman of the Senate Finance Committee, a Republican from Iowa. Rangel and Grassley were both interested primarily in probing me with questions to help improve their understanding of the pros and cons of individual accounts, in other words, Social Security privatization. I visited them in their Capitol Hill offices, and each meeting lasted approximately forty-five minutes.

Initially, in the earliest weeks of the advisory council’s work, I was inclined to support one of the individual account alternatives. After all, TIAA-CREF was proof of the effectiveness of a private pension system with individual accounts. But during my first year on the council, it dawned on me that Social Security problems weren’t so much a set of technical pension management questions at all. Instead, when one asked the more fundamental questions—what is the purpose of Social Security and what is the purpose of reform?—it became clear that Social Security plays a very different role in society. The advisory board, over the course of a year, formed three distinct factions. The Washington Post described this in a January 19, 1997, article by Brett Fromson titled “Wall Street’s Social Security Maverick: To TIAA-CREF’s Tom Jones, a Social Safety Net in Private Hands Isn’t in America’s Interest”:

Through a process of elimination, I came to side with the first faction. If the size of poor people’s retirement nest egg was going to be dependent on individual savings and how well they invested individual accounts in the stock market, many would be left with insufficient retirement funds, in part because their accounts would be small regardless of investment performance. And if we followed the third faction’s vision, it was likely the government would still have to provide for those who selected investment strategies that performed poorly. Ultimately, Social Security had an overriding obligation to be a safety net for the nation’s poor.

In January 1997 I testified on Social Security solvency and privatization issues at hearings convened in the Park Avenue headquarters of the Council on Foreign Relations by the Senate Finance Committee and the Senate Budget Committee. The January 19 Washington Post article covered the event.

Now with some twenty-five years’ hindsight, I stand by the policy positions I adopted with the 1994 Social Security Advisory Council. Most Americans who had defined-benefit pension plans replaced by 401(k) or similar defined contribution pension plans are approaching retirement with severely inadequate retirement savings. The shortfalls are driven primarily by high fees and expenses, and by poorly timed investment purchase and sale activity. Very few individuals can manage stock market investments successfully through periods of severe market turmoil such as the dot-com boom and bust in 1999–2001 or the financial crisis in 2008. The retirement income floor provided by Social Security as a defined-benefit system is even more critical to basic income adequacy for older Americans today than it was twenty-five years ago.

Outside of TIAA-CREF I began to take on additional board responsibilities. In 1992 I became a director of Thomas & Betts Corporation, a public company industrial parts manufacturer, and I also joined the Cornell University Medical College Board of Overseers and the Brookings Institution board of trustees. In 1993 I was invited to join the Cornell University board of trustees, and served on the presidential search committee in 1994. In 1996 I was invited to hold a “public member” seat on the board of directors of the Federal Reserve Bank of New York, and was appointed vice chairman in 1997. I also joined the Public Broadcasting Corporation (WNET Channel Thirteen) board of trustees. In 1997 I joined the public company boards of Travelers Group and Freddie Mac (Federal Home Loan Mortgage Corporation). These experiences enhanced my skills by helping me develop deeper insights into different CEO leadership styles and board governance practices.

Figure 15 / Tom and Addie dressed for black-tie event, April 1995

I first met Sanford Weill, CEO of Travelers Group, on the Cornell Medical College Board of Overseers, and we began to interact more frequently after I joined the Cornell University board of trustees because Sandy was on both of those boards and we often worked on the same committees. In September 1996 Sandy invited me to breakfast and asked me to join the Travelers Group board of directors, which I did in January 1997. In July Sandy invited me to lunch, and then invited Addie and me to join him and his wife, Joan, for dinner at their home later that month. Sandy and I had dinner again one week later and he asked me to become CEO of asset management at Smith Barney, the brokerage firm subsidiary of Travelers Group.

This was a very difficult decision for me. On the “no” side, I was content and satisfied with my job at TIAA-CREF, and I wasn’t looking for new opportunities. I had a good relationship with John Biggs, and we were an effective team. TIAA-CREF was doing very well under our leadership, and I had formed a strong emotional bond with many TIAA-CREF employees. In the “yes” column, by contrast, one consideration was the fact that I was impressed with Sandy Weill’s energy and track record, and his stated ambition of building a dominant global financial services company. Here was a man who might very well become a pioneer in his impact on the financial services industry, and the idea appealed to me to experience working with someone of that vision and stature. I’ve always been attracted to big personalities—people with big dreams and vision and energy and achievement.

The fall of the Berlin Wall a few years earlier and the emergence of China and the dynamic Asia Pacific economies suggested the possibility that the world might be in the early stages of a major wave of economic globalization, and here was a chance to work in global finance. While TIAA-CREF was a major global stock investor, all of its customers and business operations were in the United States, as was all of my prior professional experience at John Hancock and Arthur Young. Global business exposure and experience would strengthen my résumé.

As usual, I placed significant reliance on Addie’s assessment of the situation and her recommendations.

“I love Joan,” she told me. “And I think that Sandy really likes you and cares about your career.” She had said the same thing about Clifton Wharton and his wife, Delores, but she was neutral in her assessment of John Biggs.

So I decided to leave TIAA-CREF and join Sandy Weill at Travelers Group. This continued a consistent pattern throughout my career: I gravitated to bosses with whom I formed an emotional bond. Perhaps this was because from the very first day of my business career, after the “black militant/guns at Cornell” branding, I was always looking over my shoulder and preparing for the worst while hoping for the best.

I went to Arthur Young to work for someone who already knew me and personally recruited me. I was also recruited to John Hancock by people who already knew me personally. I went to TIAA-CREF to work for Clifton Wharton, who personally reached out to recruit me, and who was well known for caring about the careers of his subordinates. You don’t have to look far to find former subordinates who praise Dr. Wharton’s positive impact on their careers and lives. But I had ended up working for John Biggs, who did not have a strong reputation in this regard. In August 1997, I went to work for Sandy Weill, who was surrounded by people whose lives had been transformed by being part of his team.

I sent a resignation memorandum to the TIAA-CREF employee community:

I was not expecting or prepared for the emotional outpouring my resignation triggered from TIAA-CREF employees. I’m proud that the messages I received suggested that I had inspired many of my associates, and reflected the comments that Mark Wright had made about me to Black Enterprise Magazine several years earlier: “I’ve sat in on meetings with him and I feel uplifted. I see it in other people’s faces—the pride, the good feelings, the belief that what TIAA-CREF is doing is not just right, it’s good. The bottom line for motivating people is getting that kind of buy-in. He gets it.” The emotional response made me doubt my decision. The more melancholy the letter, the more detailed in its recounting of our time together and the impact I’d made on that particular person, the more regret I felt. I gathered the many letters, printed out some of the hundreds of emails, and put them in a keepsake folder. I wondered if I would ultimately regret walking away from a unique and truly enjoyable business and life situation which I might not be able to replicate. Here are just a few of the sentiments expressed:

Was I wise to leave TIAA-CREF? I think I’ll never know. It probably would have been fairer for me to have given John Biggs the benefit of the doubt and served the entire term as his COO partner during his CEO tenure. In a prescient warning, one TIAA director, a Wall Street veteran who had advocated for me to become TIAA-CREF CEO in 1993, according to Wharton’s biography, said to me as I was leaving, “Tom, I wish this wasn’t happening but I also wish you well. You know, Sandy Weill attracts all kinds of people. Some of them are good and some are not so good. You should be careful.”

Biggs did not step down as CEO until late 2002, which for him was one year after the normal retirement age of sixty-five, and only then in the context of newspaper reports that he was expecting to be nominated by the Securities and Exchange Commission to become the first head of the new Public Company Accounting Oversight Board (PCAOB). TIAA-CREF was left with no president in place and no obvious internal succession candidates, so the board went outside for a new CEO.

I was contacted by two members of the search committee and was encouraged to “put my hat in the ring” as a candidate for the CEO position. I responded that I would be very interested if the TIAA-CREF board wanted to offer me the position, but I declined to be one of several candidates in the search process. My reasoning was that there was a high risk for me that someone would “leak” the information regarding my candidacy and Sandy Weill would learn about it and be furious at what he would perceive as my disloyalty. I was not willing to risk losing my position at Citigroup before being assured of obtaining the CEO position at TIAA-CREF.

In late 2002 the TIAA-CREF board named Herbert Allison from Merrill Lynch as Biggs’s successor. Less than one year into Allison’s term, the expense-cutting ax began to fall at TIAA-CREF. The company laid off five hundred people, 8 percent of all employees. I blamed myself because I felt partly responsible. The cuts, I believe, almost certainly would not have happened if I had stayed at TIAA-CREF and become CEO. I’m certain that we would have developed growth strategies to offset expense pressures, and we would have preserved the TIAA-CREF “caring culture”—caring about customers and caring about employees.

Over the years I have stayed in touch with the TIAA-CREF alumni network in the New York metro area, and even today there’s an overriding air of sadness among the alumni that TIAA-CREF took a wrong turn in the years following Biggs’s tenure. Most significant was the destruction of the company culture and of TIAA’s unique fixed-income investment capabilities in private placement bonds, commercial mortgages, and commercial real estate, which delivered superior investment returns and lent a critical competitive advantage. I suspect that the CEOs who followed Biggs didn’t fully understand and appreciate the capabilities of the TIAA investment organization.