Let's go straight to the bottom line. Bram Goldsmith would want it that way.
Goldsmith, chairman of Beverly Hills-based City National Bank, was paid $3.1 million last year, more than any other banker in the United States.
In fact, the head of the 135th-largest U.S. bank made more than the chief executives of the nation's three biggest banks--Bank of America, Citibank and Chase Manhattan-- combined. The top bosses at those banks were paid a total of $2.35 million in 1984.
Why was Goldsmith, banker to the stars and one of Los Angeles' premier deal-makers and philanthropists, paid so much?
Aside from the fact that City National has consistently outperformed most other banks during his 10 years as chief executive, the far-sighted Goldsmith's contract pegged his compensation to appreciation of the bank's stock. When the bill came due early this year, Goldsmith's contract was worth his regular pay of $600,000 plus $2.5 million in stock gains.
As Goldsmith would say without apology, a deal is a deal.
The story of Goldsmith and City National is more than just a portrait of a successful businessman and his shop. In it is a glimpse of the tightly guarded financial secrets of Hollywood stars and their agents and a lesson in how to succeed in banking at a time when others with more assets and more experience have failed.
Goldsmith, 62, has been chairman of City National since 1975, but his involvement with the bank goes back to its birth in 1954 in the locker rooms and card rooms of Hillcrest Country Club in West Los Angeles.
The bank's founder was the late Alfred Hart, a blunt-spoken liquor wholesaler whose partner at the time was Ben Maltz, a whiskey broker from Chicago who happened to be young Bram Goldsmith's father-in-law.
Hart believed there was room in Los Angeles for a new bank catering to well-off professionals and growing small businesses, a niche that the bank has successfully exploited to this day. Hart persuaded his Hillcrest friends to switch their business to City National, where they'd receive personal attention and the utmost discretion. Maltz was the first chairman of the board.
The bank, unlike its larger, more conventional competitors, always stressed salesmanship. When Goldsmith was interviewed for this story in the Hillcrest dining room, his first comment was, "So when are you going to move your account?"
One of the bank's early customers was Frank Sinatra, still a loyal account-holder, who according to acquaintances and newspaper accounts often called Al Hart "my best friend." It was Hart who carried Sinatra through some lean years in the early 1950s and helped finance his comeback by underwriting production of the film "From Here to Eternity." Hart at the time was a director of Columbia Pictures, which produced the movie.
A decade later, City National helped Sinatra through another crisis, the kidnapping of his son Frank Jr. in 1963. The bank put together the $240,000 ransom (actually $239,985 because three $5 bills were wrecked while being photographed in a microfilm machine), charging Sinatra only the $2,000 that wasn't recovered when the kidnapers were caught.
"Hart was a brilliant man who came out of the liquor business, a rough, tough cookie who wasn't exactly couth," said Len Shane, chairman of Mercury Savings & Loan and a friend of both Hart and Goldsmith. "He was unusual, Al Hart, a sterling guy who was never polished."
Not long after the bank was established, a young builder came in to borrow money to put up some houses. His name was George Konheim, president of fledgling Buckeye Construction, now one of the city's major real estate development firms.
Konheim recalled that day 30 years ago. "We went into the bank to make our first loan, and Hart said, 'Look, builder, I've checked you out through the FBI and everybody else and you're clean. Here's your loan, now go out and make some money."'
Konheim was in charge of bricks and boards at Buckeye Construction. His partner, Bram Goldsmith, handled the finances. It proved to be a fortuitous union of builder and banker.
Los Angeles in the 1950s and 1960s was booming. Buckeye boomed along with it, graduating from building houses in Downey to office buildings downtown and along Wilshire in Beverly Hills. The firm put up several City National buildings, including the headquarters at Wilshire and Roxbury in Beverly Hills and the downtown office tower at 6th and Olive, an investment Goldsmith described as a "slot machine" because of its predictable profitability for the owner.
The buildings weren't works of art, but they were structurally sound and usually full of tenants and always profitable.