NEW YORK -- Alex. Brown Inc. President Donald B. Hebb Jr. will step down in early spring after seven years as head of the 190-year old Baltimore-based investment bank.
"After awhile you make the contributions you will make and you need to let other people play the roles that will take the firm further," Mr. Hebb said. "I thought it was time to take myself out of the equation."
Mr. Hebb, 48, joined Alex. Brown in 1970 as one of three people in corporate finance, a number that has grown to more than 100, and became chief executive officer in 1984. He will continue with the firm as a managing director and will work directly on banking deals and asset management.
"I do this stuff 24 hours a day; leaving it would be a greater shock than my system would know how to tolerate," he said.
Mr. Hebb's years of leadership will rank among the most tumultuous years in the firm's long history. Revenues doubled, and employment grew 70 percent as the firm excelled in a climate that produced both prosperity and problems for financial firms.
In 1986, Alex. Brown abandoned its long cherished partnership structure with a public offering that brought in new capital and exposure but also accompanying pressures and scrutiny.
Reflecting on the 1986 move, Mr. Hebb said, "People are expecting us to produce a regular earnings flow, which is probably inconsistent with being in this business."
His decision to forgo executive responsibility comes at a pivotal time. A cyclical downturn has squeezed income, and several other prominent investment banks have failed or been subjected to dramatic upheavals.
Alex. Brown lost $3.1 million in the third quarter, and, although Mr. Hebb said the firm should be profitable for the year, it recently pared several dozen of its approximately 1,700 employees, an experience he described as "awful."
A committee of outside directors has been appointed to find a successor to Mr. Hebb, and the search has extended to other firms and other industries.
Given the absence of insiders on the committee and the prospect that the new chief executive is likely to come from elsewhere, Wall Street analysts speculated that Mr. Hebb's decision may have been prompted by disagreements among the firm's most senior executives.
Last year, Mr. Hebb's title was changed from chief executive to president, and an executive committee with shared authority was formed, including two other members of the firm, Chairman Benjamin Griswold and Chief Operating Officer A. B. Krongard.
"One would think he [Mr. Hebb] would continue if everything was hunky-dory," said Perrin Long, an analyst with Lipper Analytical Services.
The change in Alex. Brown's leadership comes shortly after the resignations under pressure of the heads of both Maryland's largest bank, MNC Financial Inc., and its largest insurance company, USF&G Corp.
Unlike the other two companies, however, Alex. Brown continues to be in relatively good shape, with a balance sheet and business strategy at least as successful as those of most of its competitors.
Moreover, unlike the former leaders of MNC and USF&G, Mr. Hebb will stay with Alex. Brown and is expected to play a strong role in the firm's business.
Mr. Hebb denied that politics influenced his decision.
"The basic strategy of the firm is agreed to by all parties," he said. "I wouldn't have to answer [this question] if business was booming or I was over 65, and I think it will be booming again before I'm 65, but I thought it was unfair to wait for either event."