It's Better To Be Rich Than Right: Peter May

Peter May (00:00:00):
So I get asked all the time from all these people, whether or not the career track they're on, the background they have, the education they have, is that going to lead them to real success? And I often say to them, "It doesn't matter where you come from. What matters is, are you focused? Are you working hard? And more importantly, are you over-delivering?" And our next guest is the epitome of always over-delivering. Here is someone who started as an accountant and decides to partner with one of his clients, who happened to be Nelson Peltz, to build one most important private equity firms and funds and businesses on the planet.

David Segal (00:00:31):
Yeah. And what Nelson saw, and Peter May, who's our next guest, is that he was going to do more than what was expected of him, which is something his father taught him. And Nelson saw that early on and took him into his family business. Peter takes a shot and leaves his professional career trajectory where he's about to become a partner, and he joins this frozen food company, this family business, and they go through a 50-year career together in a relationship where it wasn't always easy. I mean, they struggled. They're going from business to business, they're taking on enormous amounts of debt, but they get better and better and better, and they pioneered this concept of constructive activism.

Peter May (00:01:07):
What I think is so interesting about Peter is that, the rules that he uses to build his businesses and his empire is very simple. For example, it literally says this on their coffee mugs, it says, "Expenses down, sales up-"

David Segal (00:01:19):
And, "Cash is king."

Peter May (00:01:20):
And then "Cash is king," on the back. But they're not people that are driven by ego or driven-

David Segal (00:01:25):
No, no.

Peter May (00:01:25):
In fact, they talk about, they don't need to be right, they just want to get rich. And in fact, by using that-

David Segal (00:01:30):
I've heard stories about that.

Peter May (00:01:31):
They get incredibly rich by never having to be right, but always focusing on good businesses making them better. And by doing that exact thing, they were able to get into companies like DuPont and Wendy's and Arby's and Tim Horton's, and so many other companies and have made them incredible amounts of wealth. But also, they've taken good companies and made them great by using this exact philosophy. And he has this unique way of thinking about EBITDA and the importance of the DA, and how to view the DA and how not to view the DA, the DA being depreciation and amortization.

David Segal (00:02:00):
Absolutely.

Peter May (00:02:01):
We've got to talk about Peter's philanthropy because it's unique, whereas a lot of our big shots give lots of money, but Peter truly does engage philanthropy. I mean, he took Sinai Health and he turned it around.

David Segal (00:02:12):
He took his business skills and turned it around.

Peter May (00:02:13):
That's right. He uses business skills in every aspect of his life. It's an amazing interview. The stories are incredible. And if anyone is watching and wants to figure out whether or not they're on the right path, are they going to be able to achieve the success-

David Segal (00:02:24):
I love this one.

Peter May (00:02:24):
They want because of, they're an accountant or they're working at some restaurant, it doesn't matter. What matters is, are you over delivering consistently? It's an amazing interview. We know you're going to love it. Ladies and gentlemen, Peter May.

David Segal (00:02:36):
Peter May.

Peter May (00:02:37):
So, this big shot thing is super fun. We're having a great time. People are loving it. It's a little expensive, just to say it. At the end of the day, we are-

Peter May (00:02:47):
I'm glad you said it.

Peter May (00:02:48):
We're still stingy Jews here. It's really quite expensive, and you and I are funding this whole thing ourselves.

Peter May (00:02:54):
Not cheap.

Peter May (00:02:54):
I think, at the very least, we should at least promote our tea business.

David Segal (00:02:58):
You all see the production quality. The production

Peter May (00:03:00):
Quality is incredible. We have an amazing staff, tons of producers, and it's a little expensive.

David Segal (00:03:06):
So I'm obsessed with tea. I built David's Tea. I left many years ago, and Harley actually-

Peter May (00:03:12):
Can't believe we're doing this. This is perfect. We're doing this because we have great tea, but we also, we got to pay for big shop. Perfect.

David Segal (00:03:20):
So Harley got me back into tea. I would curate these green tea collections for you're having trouble sleeping in the evenings. I'm like, oh, you got to drink, switch coffee. You don't need 10 coffees a day.

Peter May (00:03:28):
Well, I mean, if we're going to tell the story, let's tell the story. I had been drinking so much during the pandemic. I was by myself, obviously the rest of us were. And I was drinking a ton of coffee and my anxiety was peaking. And actually you had said you should switch off of coffee in the afternoon and move to really high quality green tea.

David Segal (00:03:44):
The caffeine in green tea interacts differently. You don't get the big spike and crash.

Peter May (00:03:48):
Yeah, it's like a calm alertness only.

David Segal (00:03:49):
But calm alertness and green tea is amazing. Really high quality green tea. And then, but

Peter May (00:03:54):
Frankly, most people, I had never had high quality green tea. Most of the tea that I had consumed in my life, it was like in a gift. I'd give a talk somewhere and they give me a gift box or some sort of gift package and there'd be some random tea bags in there. But I had never actually had really high end green tea. So you very kindly started curating this box of incredibly high-end, amazing green tea. And you also began to sort of jerry rig these accessories for me. You'd say drop it in here for three minutes and then take it out, make sure it's not steaming. And you just created this incredible tea set up for me. In fact, you know this, but next to my home office, I now have a little tea area that you actually created for me. But green tea in particular, and having you curate this tea for me was this incredible new element of my life because it allowed me to stay really energized, really focused in the afternoon without having any issue with sleeping.

David Segal (00:04:44):
And that was the inspiration for FireBelly. Finally, I was like, you're like, let's do it. I'll be your partner. So we started FireBelly Tea. Most people want to take a tea bag and dunk it in the water. The reality is there's this rich experience you can get with tea where you take the time to make it properly, whether it's green tea, black tea, oolong tea, herbal teas. We're doing something special with FireBelly.

Peter May (00:05:04):
Yeah, so FireBelly is the highest, the best tea. And actually you got a chance to design every single accessory yourself.

David Segal (00:05:11):
Absolutely.

Peter May (00:05:11):
You went ahead and figured out this is the best tea cup, this is the best strainer for it. This is the best whisk in terms of how to make great matcha. But this is the best tea and the best tea products ever. And please buy our tea. We need a way to pay for more big shot episodes so we don't need your money. But we would appreciate you buying some amazing green tea from FireBellyTea.com. It is not just a pitch, it is also the greatest tea ever. And it would make us really happy.

David Segal (00:05:38):
If you don't like it, we'll give you your money back.

Peter May (00:05:39):
No, no, We don't have to do that. We're not giving the money back.

David Segal (00:05:41):
We're keeping your money, but you're going to love it. You're going to love it.

Peter May (00:05:43):
All of a sudden you're such a big shot, you're giving the people's money back, don't give the money back.

David Segal (00:05:47):
You'll give it as a gift. It makes a great gift.

Peter May (00:05:49):
It's a great gift. It's great tea, it's great accessories. You actually will really, really love it and allow us to pay for more of these big shot episodes. So that's our pitch. And all of you must be laughing wherever you're sitting right now watching this. We don't care. We have, we actually know tea well though. I mean we also know e-commerce well too. Yeah, true. So we know e-Commerce, we know tea, Fire Belly Tea. Go buy some, help us pay for more big shot episodes.

(00:06:14):
So I know our audience, I know our answer. They're going to say, yeah, they need the, we love your tea, we want to buy from you. We want to support Big Shot. Is there a coupon code I'm going to get my aunt or someone in my family's going to call me and be like, I love the tea. It's really great. Can I get a discount? So is there a code we can give them?

David Segal (00:06:30):
Big shot 15.

Peter May (00:06:31):
Big shot 15, okay,

David Segal (00:06:32):
Big shot 15.

Peter May (00:06:32):
Okay, use code big shot 15 for 15% off our tea and tea accessories. And if you don't like the tea, you don't like the accessories, David will give you your money back. I will not. He will. That's it.

David Segal (00:06:43):
I'll give you your money back. I got you. I will.

Speaker 1 (00:06:44):
[singing 00:06:48]

Peter May (00:07:03):
So let's start with the big question that we have, which is you are currently on the board of, let me see if I get this straight. Wendy's, Tiffany's, Mondelez. You created something called constructive capitalism. How does a middle class kid from nowhere start? And what was it like growing up? And we're curious about this journey from that moment at around the dinner table to where you are now. What was it like growing up at your house?

Peter May (00:07:33):
I grew up in the fifties. I was born in 1942, just at the end of World War, in the beginning of World War Two, but had no real relationship to the war. The fifties was probably one of the special times in America where the war was over, Eisenhower was president. It was an incredibly quiet time when you look at the way the world is today and how it's been from the time that the Vietnam War started or some of the college campus issues in the mid sixties.

(00:08:09):
The time I grew up was I grew up in a suburb of Long Island. You rode your bike everywhere. You didn't lock your door, the keys were in the car, in the driveway. It was that kind of a time. And it was really, none of us knew there was anything going on in the world except that we would have air raid drills because it was a cold war. So you'd have air raid drills, we'd go under the desk and stuff like that because the Cold War had gotten started by the time when I was in elementary school. I grew up in a middle-class family, reasonably affluent for the context of my people that I knew. My parents grew up in Brooklyn. Interestingly, none of my family, my mother's family, three of her four grandparents were born in the United States. And my father's family, his parents were both born in the United States,

Peter May (00:09:12):
Which is very rare.

Peter May (00:09:12):
Which is very rare.

Peter May (00:09:12):
Relative to everybody else.

Peter May (00:09:15):
Exactly. But they both lived in Brooklyn. My father's father was a butcher, but he had two butcher shops. So he was a successful butcher and had a little real estate and they had a two family house. And my father's family lived downstairs and my mother's family lived upstairs. And that's where my parents met.

Peter May (00:09:37):
Amazing.

Peter May (00:09:37):
And my mother was an unusual woman because her mother was a Bella Vista. She loved to do stuff. And she worked. And my mother's father worked for the government. He was a customs inspector. So very modest families, but very aggressive in terms of education. So my mother had went to Hunter College and then got a master's at NYU in 1934,

Peter May (00:10:10):
Which was really rare to have a master's as a woman.

Peter May (00:10:13):
Exactly. And she was a social worker for about 10 years. And her makeup was do stuff. And my father, interestingly was also very interested in going into business and doing something creative. His father said, I'll pay for college if you want to be a doctor. And he said, I don't want to be a doctor. I want to be in a businessman. And so his father would not pay for college. And so he worked in the Diamond District during the day and put himself through NYU and got his bachelor's degree and then became a CPA and then joined one of his clients. And then the guy who, he has the CFO. And when the guy died, he then became president. The guy died, he took over the company. He built it into a pretty good-sized company called Diana Storage Corporation. That was on the New York Stock Exchange.

Peter May (00:11:07):
He was a Schmidtologist.

Peter May (00:11:08):
What?

Peter May (00:11:10):
He was a Schmidtologist. His clothing. Right?

Peter May (00:11:11):
Exactly. Exactly.

Peter May (00:11:13):
We love the Shmottopism. The connection to Jews and the Shmottopism is amazing.

Peter May (00:11:17):
And all the people I grew up with, most of their parents were working on Seventh Avenue making stuff. My family was fancy because we were buying the stuff they were making.

Peter May (00:11:28):
You were the retailer.

Peter May (00:11:28):
So we were the retailer, exactly. But every vacation that we ever had as a family was driving to my aunt, driving to Florida and stopping at every store on the way so my father could check them out or going, we went west to Oregon or to Wyoming, and there were stores all over the country, which was a great-

Peter May (00:11:48):
So it was like research basically for the store.

Peter May (00:11:51):
Exactly. He was making his stops and visiting and seeing what was going on.

Peter May (00:11:54):
And you're seeing this as a young kid. It must've had quite the impression on you.

Peter May (00:11:56):
And so to me that was pretty cool. And I wanted to go. I wanted to follow that. And my father was a great role model, an interesting role model. When you think about parents today, they're so involved with their children. In my generation, the parents were not involved with their children except to set an example, provide an education, be a role model. But I don't remember very often having a catch with my dad. We would go out as a family. He was a big golfer, and he'd come home from the golf club early, which most parents didn't, fathers didn't do. And we'd go into the city to do something, go to a museum or whatever, because my parents loved culture. And that rubbed off on me tremendously.

(00:12:52):
But it wasn't the kind of today I see with my children and how they raise their children. They're in every detail of the life they go to every game.

Peter May (00:13:01):
Every extracurricular activity.

Peter May (00:13:03):
Everything, that they also push their kids to the point of almost craziness. But it wasn't like that. So my father was, I never even thought of him as dad. I thought him as well. I may called him dad, but he was my father and he was incredibly ethical standup guy. Everybody thought he was one of the great guys in the community.

Peter May (00:13:30):
Did business become a way for you to bond with him?

Peter May (00:13:30):
Later on in life. Yes. Later on. No question about it. And so during a couple of summers, I worked in his office for a summer job and I was always Sam May's son. And I knew that was not going to be my life.

Peter May (00:13:46):
You wanted to be independent.

Peter May (00:13:48):
I wanted to have my own identity and there was no way I was going to do that. But I did follow his entree into career path, which was he was a CPA and then joined a client. And in the days that I wanted to get involved in business when I started out, so I went to the University of Chicago.

Peter May (00:14:10):
Great school.

Peter May (00:14:11):
Wonderful school. I went there. I didn't get into the ivies that I applied to.

Peter May (00:14:15):
Okay. Pretty good.

Peter May (00:14:17):
Have to be honest. Didn't realize that I went to a better school than most of the ones I applied to.

(00:14:22):
But actually my experience at the University of Chicago totally changed my life. I went there having no idea what it was like. I had gone out to see it. Beautiful school. Most people think of it like NYU, that it's in the middle of the city, but it's not. It's in Hyde Park, which is a beautiful area. And the campus is really one of the prettiest campuses around, but it's a very unique place because the life of the mind is what they talk about. And when I got there, I started to meet a bunch of kids and said, I don't know if I'm going to make it here. This is not-

Peter May (00:15:02):
Were they academic? Were they studious?

Peter May (00:15:05):
They were very studious, very serious. And I was decent student, but I wanted to have some fun too. I was going to college. And so Chicago has a quarter system where you go, not semesters. During my first quarter I said, I don't know if this is for me. And so I applied to transfer to Penn. I had been rejected from Penn. Now I got into Penn because as a transfer student, I guess it's easier and when you're coming from the university.

Peter May (00:15:37):
You took the back door.

Peter May (00:15:39):
It's not so bad, right? And I also didn't know whether I could compete at Chicago. Then I got my first set of grades and I did pretty well. And I said, oh, okay, I guess I can. And in the meantime there was a small group, there were some small fraternities at Chicago and I ended up joining one and meeting a bunch of people that actually did want to go out and have a drink once in a while and date and whatever. Of course, you couldn't date girls at Chicago because they were, you had to go to Northwestern or somewhere else because.

Peter May (00:16:09):
They didn't like you were from Chicago.

Peter May (00:16:12):
Chicago. No, it wasn't that. A lot of, no, the girls, I don't want to be pejorative. They weren't that cute. Okay, great.

David Segal (00:16:18):
Got it. Peter, let's just go back to your dad for a sec. He had a saying that has really stuck with me, which is do more than what's expected of you.

Peter May (00:16:25):
Where'd you learn that ?

David Segal (00:16:26):
We did our homework.

Peter May (00:16:28):
Okay. There is no question that that was the single biggest influence on me.

David Segal (00:16:32):
Yeah. So when did that sink in for you? Where did that really-

Peter May (00:16:35):
When I first started in any job that I did. So when I was in high school, I caddied okay on a golf course, on a golf club that we belonged to.

David Segal (00:16:47):
Wow.

Peter May (00:16:50):
And most of the caddies kind of resented me, because my parents were members of the club. I never played golf. One of the things that I regret is my father and I never played together and he was a great golfer and I love golf now. But we never, he wasn't the kind of father who said, okay, I want to teach you golf, which was kind of, when I look back, disappointing.

David Segal (00:17:15):
And you never asked? You never were like, "I want to play."

Peter May (00:17:15):
No. In fact, because he was so good and I was never much of an athlete, I figured I don't want to compete with that. So I played tennis, but I did caddy and just at the beginning of starting to do anything where I was interacting with other people and having a responsibility, my father had, he said, "Whatever you do, do more than what's expected of you." And that has been a mantra that I've used as kind of the base of everything I've ever approached in life. And whenever I talk to younger people and kind of mentor or try to give them a view of how to look at the world, I think that that simple expression is incredibly meaningful because just living up to the objectives of whatever you're doing, it's okay, but if you want to make a difference, you have to really roll up your sleeves and do it.

Peter May (00:18:14):
Do you talk to your children now about that same expression? Have you sort of instilled that in the next generation?

Peter May (00:18:20):
Definitely. But I mean, my children are old. My son is 57, and my daughter is 53.

Peter May (00:18:24):
Young guy, young man.

Peter May (00:18:27):
But I've instilled that all the way through and they've absolutely.

David Segal (00:18:31):
It's much more succinct, elegant way of saying, "Under-promise, over-deliver."

Peter May (00:18:35):
Exactly. Everybody has their own thing. I mean, my father used to carry this little book around and at the front of it said "gumption" and then it had little sayings like about things to give you a drive. And I think a lot of it has to do with his own, the fact that his father wouldn't pay for college and interesting, it affected me too. And it affected his attitude towards how he should treat me as a young adult. Because my wife, who's now my wife, and we'll be married 60 years this summer.

David Segal (00:19:20):
Wow, that's incredible.

Peter May (00:19:21):
We met in high school and we dated through the last end of high school, went our separate ways. She went to school in New Jersey. I went to school in Chicago. We were not going to see each other, be together, but in the beginning at Chicago, I was fairly lonely and hadn't dated much.

(00:19:40):
And we would communicate. And then I went away. During both of the first and second year summers, I went around the country with a bunch of guys the first year and around Europe the second year. And I think my parents encouraged that they didn't really want the relationship with Lenny to continue. They thought I was much too young, which I probably was. Lenny went to a junior college because her mother, her parents said, you're not serious enough. You're never going to graduate from a four year school. So they said you got to go to a junior college and she went to a junior college in New Jersey and realized that she actually did pretty well and was going to go on and get a degree. And so we never really talked about her, us being together. And then so she applied to Boston University and got in and she was going to Boston in her junior year. And I called her one day and I said, "Why don't you come out to Chicago?" She said, "I've already got into Boston. What are you talking about you?" I said, "I really would like you to come to Chicago." And so she ended up at the last minute flying and she went to Lake Forest College in Lake Forest, Illinois.

Peter May (00:20:56):
Quite a bet. She took on someone who she didn't know if you were serious. She didn't really know much about you at this point.

Peter May (00:21:02):
Well, she knew a lot about me, but she didn't know what, whether there was a commitment or not, we were kids. So did it matter? I don't know.

Peter May (00:21:10):
It was young love.

Peter May (00:21:12):
It was young love. Exactly. So she took a risk and her father, I remember, said to her, "you don't really know what you're doing. You want to do this?" And she said, ""I do. Anyway, so she came out to Chicago and I used to make the commute. Lake Forest is a northern suburb and the university is in the southern part, south of the city. And I used to make that trip back and forth-

Peter May (00:21:37):
Better than Boston

Peter May (00:21:38):
-every weekend. Yeah, no, it was definitely.

Peter May (00:21:40):
When you were in college though, as you sort of thought about it, was it about, you mentioned earlier that your grandfather wanted your father to be a doctor.

Peter May (00:21:48):
A doctor.

Peter May (00:21:51):
I went to law school not to become a lawyer because frankly everyone around me told me, "If you're going to be a successful person, you should go to law school." So I mean, you have three choices. A doctor, a lawyer, maybe an accountant, right.

Peter May (00:22:04):
Or an investment banker, for your generation.

Peter May (00:22:07):
For my generation, yeah, but not for yours. There is something deeply rooted in the Jewish psyche and Jewish culture about our parents and frankly our grandparents. My Bubby and Zadie telling me, "you should go to law school because they can take everything away from you, but they can't take away that piece of paper."

Peter May (00:22:21):
No, it's the professional degree.

Peter May (00:22:23):
Where did that come from? You never hear, "You should go to trade school." That's right.

Peter May (00:22:25):
No, no.

Peter May (00:22:26):
But you can also take-

Peter May (00:22:27):
No, because let's put it into perspective as the Jewish ethos is, education is a fundamental part of what being Jewish is and also you marry the need for education and a degree, which is something that they can't take away from you. But also a profession that if you, you're part of the diaspora and you have to go somewhere else because you can't, this is the psyche that goes back to the pogroms and all the way back that you've got that. If you got that experience that you can always make a living.

Peter May (00:23:12):
But why doctor, lawyer and not electrician, plumber. Right? Cause you can take that with you too

Peter May (00:23:18):
Because it doesn't fit the educational psyche of the Jewish understanding of what success is. Not that, I have a nephew who's a plumber and very successful, it's a great living, and his son went to Penn State and is now going to work in his business. So it's a different world today, and people are starting to respect the trades in a different way. But in our day, their ancestors were tradesmen. They didn't have the opportunity for education. So the objective was to be educated and to have some unique license or role that allowed you that you could always fall back on. There was always an expression you can always fall back on.

Peter May (00:24:08):
I've heard this every day in my entire life. You get a lot of grace you can fall back on it. I mean, to me that speaks to multi-generational trauma almost, that for generations we were running away. We were trying to survive. And so one, I think our parents and grandparents wanted us to have a better life than they had.

David Segal (00:24:24):
You still get it from your parents. I mean, Harley runs one of the most successful tech companies in the world and still keeps up his law license just in case.

Peter May (00:24:31):
I do. You never know.

Peter May (00:24:32):
I still keep my CPA license.

Peter May (00:24:34):
That's right. It's a ridiculous thing. But again, it's kind of like-

Peter May (00:24:37):
God forbid I should have to practice.

Peter May (00:24:38):
Just in case. Right? Just in case. Let's talk about the CPA, because one of the things that we find fascinating about the story is you and Nelson Peltz have had this incredible partnership and career together. You finish school, you become a CPA, which at a firm, which I think became KPMG.

Peter May (00:24:57):
So here, take a step back. So in the summer between my sophomore and junior year-

Peter May (00:25:04):
In the summer between my sophomore and junior year, I was in a three-two program. Chicago had this great program where you could be in the college for three years and then go to either the business school or law school for the next two years, which was a great program because this was now Vietnam was starting. I didn't want to go to Vietnam. There's another story I'll tell you about with my first child. I was in a hurry. I wanted to make a living. I wanted to start my career, and so this was... The concept of MBA in those days, not that many people had MBAs, and it was long before they started saying, "You have to have a couple of years of experience before you go get your MBA." Frankly, my view is you lose the best and the brightest because the ones-

David Segal (00:25:50):
They never go back.

Peter May (00:25:50):
... that are successful, they never go back and get the MBA.

David Segal (00:25:52):
100%. Right.

Peter May (00:25:53):
In any event, so I was in that program, and so here's a fun story about my parents and their attitudes about things. Leni and I got married between my first year of business school and my second year of business school. My father said to me, "Okay, you're married. I'll pay for the tuition, but you're on your own." He didn't pay what the equivalent of room and board, he didn't pay anything he said, because this was back to his psyche from his father.

David Segal (00:26:26):
His father, right.

Peter May (00:26:28):
I said, "Okay." I had some wedding present money.

David Segal (00:26:34):
It's like your bar mitzvah money. Yeah.

Peter May (00:26:37):
Exactly. We had some wedding present money and we lived. Actually I said, "Well, can I borrow some money from you for the first to get started?" He said, "Yes." He lent me some money and we lived in married student housing, paid $112 a month for a really nice apartment. I took the winter quarter, so now I'm in my second year in majoring in accounting, because that was the profession. It was also my father's. Because in those days, investment banking wasn't even a thing. Jewish kids never were going into investment banking.

David Segal (00:27:10):
Why is that?

Peter May (00:27:10):
Because there was maybe Kuhn, Loeb and Lehman Brothers, but they were tiny little firms and all the rest of the banks were-

David Segal (00:27:20):
No Jews.

Peter May (00:27:20):
No Jews. Okay.

David Segal (00:27:22):
Was the practice of raising money and merging companies and acquiring, was that all done privately without investment bankers in those days?

Peter May (00:27:30):
Well, there were merchant banks who did that, but they were very small. It was mainly the commercial banks that raised money. I mean, that's a whole nother topic, but the whole financial world changed dramatically from the time I started out till later on because it was really only the blue chip companies that were going public, raising money, doing financings, bond stuff, all that. All of the Mike Milken, who I was very close to still, and the finance that was created later was 10 years later from this time.

David Segal (00:28:08):
Got it, so the small companies were family businesses.

Peter May (00:28:10):
They were family businesses or they were financed by local banks, and that was it. Traditional bank loans that were modest and highly secured and that kind of stuff. The ability to be entrepreneurial and grow something from scratch wasn't that easy because there wasn't all kinds of resources of financing in those days. Anyway, just to finish the story about, so I took the winter quarter off, worked for Arthur Anderson, which was still alive in those days, 24/7 for three months. They paid time and a half of overtime, so I just-

David Segal (00:28:52):
You want that. You want to do all the overtime.

Peter May (00:28:53):
I wanted to work as much as I possibly could. Made enough money to pay for the rest of my year at school, to pay my father back and have enough money to start when we went back to New York. In between, during that first year also, Johnson was president and I'm sitting in my apartment one day and my wife at the time, she had graduated as a teacher or she was either student teaching or teaching. She had a job teaching in Chicago's school system, and she was out teaching. I'm sitting watching TV and Johnson gets on the television and says, "We're, stepping up the troops in Vietnam. We're ending..." I had a student deferment and then a married deferment, "We're ending married deferment, you have to have a child."

David Segal (00:29:45):
Wow.

Peter May (00:29:46):
My wife Leni comes home from school-

David Segal (00:29:49):
Time to have a kid.

Peter May (00:29:50):
... and I said, "We have to have a kid." Swear, she'll tell this story. She was furious. I mean, our original plans were we weren't going to have a child for five years. We were going to travel.

David Segal (00:30:01):
Set up your life. I mean, you're young at this point, probably early 20's.

Peter May (00:30:06):
I was 22, 23. I was 22 at that time, because John was born when I was 23. I said, "We have to have justice." She said, "No way. Go in the reserves. Go do what you have to do." I said, "No, I really want to start my career." Her nickname for me is Persistent Pete, even though nobody calls me Pete, but that's-

David Segal (00:30:26):
That was her thing.

Peter May (00:30:27):
Persistence is one of my hallmarks. To make a long story short-

David Segal (00:30:34):
You had kids.

Peter May (00:30:37):
Actually a week later she said, "Forget this, I'm not ready." But it turned out she was pregnant, so we were lucky.

Peter May (00:30:42):
Too late. You didn't have to go.

David Segal (00:30:46):
And that got you out of the war.

Peter May (00:30:48):
So I had now a married deferment, and I was able to get started in my career. I joined Peat Marwick Mitchell and now KPMG. At the time, it was the largest accounting firm in the world. I had interned there for the summer before, so I knew the firm and I liked it. My objective was, the thing about accounting, it's the language of business. The way I approached it, I was in the audit department, and the way I approached it was, this is a way to learn about lots of different businesses. The typical professional accountant, you go out and you do your audit and you follow the audit guide and you do what you're supposed to do, which I did, and I was good at it. My objective was, what does this company do? To really learn about the business and what do they do? What are their issues?

(00:31:48):
Really when you're doing it, when you get as an auditor, you get to meet senior management and you get to have... I wouldn't just ask them about an accounting question or I would say, "Where are you taking this business? What's your objective? What are your problems?" It was a great education.

David Segal (00:32:11):
Sure. Of course.

Peter May (00:32:12):
My objective was to do it for a few years, to learn as much as I could and then go do something in the business world. It turned out that Nelson Peltz, who's been my partner now for more than 50 years, was one of my clients.

Peter May (00:32:27):
He was running his family's business at the time.

Peter May (00:32:29):
He had a small family business that was in the food service distribution business. They basically sold-

Peter May (00:32:35):
Frozen foods and hospitals, stuff like that.

Peter May (00:32:38):
... frozen foods and stuff to restaurants and hospitals, all the institutional kind of clients, mainly restaurants and stuff. He had this enormous ambition.

Peter May (00:32:49):
Even from the get go, even when you first met?

Peter May (00:32:51):
From the get go he always had. He's the child of, he's 16 years younger than his next sibling, and so he was from a different part of his family. He married, his first wife's father was a very successful businessman, started Emerson Radio way back when, and that was his kind of mentor. Nelson always wanted to build a big business. Even though he was part of this small family business, he went to Peat Marwick because it was one of the big eight accounting firms.

Peter May (00:33:32):
He wanted to have-

Peter May (00:33:33):
He wanted the imprimatur of a firm like that, so when he was ready to build the company, he had the pedigree.

Peter May (00:33:41):
Before we go forward though, one of the things Dave and I, when we were trying to understand and go deeper on the Peter Nelson relationship, we sort of laughed, Dave and I both have the same accountants.

Peter May (00:33:51):
If you can figure that one out, tell me.

Peter May (00:33:52):
We have the same accountant who probably is going to watch the show and be like, "I thought we had a better relationship." Our relationship and most entrepreneurs' relationship with their accountant is fairly transactional.

David Segal (00:34:07):
We wouldn't think of becoming partners without them.

Peter May (00:34:09):
That's right. It's, you have a job to do, an audit, tax filing, something like that, registration for a business. It sounds like your approach to accounting and your role as an accountant was very unique. It was very much more consigliere or business consultant.

Peter May (00:34:27):
Exactly. In any professional role you have, you're good at it if you add value to your client. Adding value is not just answering a tax question or answering an accounting question. It's helping sort through business issues and be a mentor. Consigliere is one way of looking at it. Not a mentor, but being a thought partner. Nelson and I are the same age. He's six months older than me, and we became friends, and so the relationship developed in a different way. I had been offered jobs by other clients who wanted me to be a controller or whatever. That wasn't in any way interesting to me, and I didn't think I'd stay as long as I did.

(00:35:19):
There was also in the back of my mind, to be perfectly honest, my father was getting older. In the back of my mind, I always said he was very conservative in the company he built, although he built it to a pretty decent sized company, and in the back of my mind, there was always, well, maybe I should go and take that company to a different level.

Peter May (00:35:41):
You could be a retailer. Your history.

Peter May (00:35:44):
Exactly, but they were in a number of different businesses and some great spin-offs from their company, which is a whole nother story. Home Depot came out of Diana stores actually.

Peter May (00:35:56):
Wow. Home Depot came out.

David Segal (00:35:57):
How did that happen? We need to go there.

Peter May (00:36:00):
I'll get to that. No, so you want to hear that story?

Peter May (00:36:04):
Yeah. We want to hear that story.

Peter May (00:36:05):
My father, his company had expanded into discount stores and they owned a company called Handy Dan Home Improvement, and Bernie Marcus was the general manager of that business.

Peter May (00:36:26):
Wow.

Peter May (00:36:27):
Bernie came to my father and said, " I think there's a real opportunity to build a big box retail concept." My father's very conservative. He said, "I don't think that's such a good idea."

David Segal (00:36:38):
I don't see it. Yeah.

Peter May (00:36:38):
It sounds expensive.

Peter May (00:36:43):
Bernie said, "Well, I'm going to do it, and I'd love you to invest." He wanted my father to invest $250,000.

Peter May (00:36:50):
Which at the time was...

Peter May (00:36:51):
Which it was serious money.

David Segal (00:36:51):
This is the sixties probably, right?

Peter May (00:36:56):
This was in the sixties. My father said, "I don't really think I'm going to do that." The total capitalization of Home Depot when it was ultimately, and there was all the stories about how Ross Perot was going to do it, and then he didn't. That's how it got funded through InverMed. The total capitalization was $2.5 Million dollars, so my family would've owned 10% of Home Depot. Oh my

David Segal (00:37:24):
Oh, my God.

Peter May (00:37:25):
Which today has a market cap of somewhere in the neighborhood of $200 million, I believe. $2 billion.

Peter May (00:37:29):
Exactly.

David Segal (00:37:31):
Every Jewish guy has a story of, "Oh, I could have."

Peter May (00:37:34):
If I only could have invested in it.

Peter May (00:37:35):
No question.

David Segal (00:37:36):
It's the Jackie Mason joke, right? It's like, you see that building? I could have bought it for 10 million bucks.

Peter May (00:37:40):
When did you buy it?

David Segal (00:37:41):
Why don't you buy it now? Too expensive.

Peter May (00:37:44):
That story goes also with the home that I used to have in Palm Beach, which I sold a long time ago and every time drive I drive by I say, "That house is now worth $100 million."

Peter May (00:37:53):
Even at your level and your stage of life, you're still doing that, because we do that all the time.

Peter May (00:37:56):
My wife's answer is, "So would we live differently?"

Peter May (00:37:59):
That's right. You decide. Nelson's your client.

Peter May (00:38:03):
Nelson's my client.

Peter May (00:38:04):
He's ambitious.

Peter May (00:38:09):
It was a confluence of things. I was named a partner.

David Segal (00:38:12):
At KPMG?

Peter May (00:38:15):
At Peat Marwick. They told me, "You're going to be a partner." Which was, I was one of the younger guys to be, because again, I always did more than was expected of me. Just a lot of guys were there ticking and tying and doing what they did, and I was creating value for my clients. At the same time, Nelson was about to merge his company into a small public company, and he needed a financial guy. He came to me and said, "I'd love you to join me." I said, "Well, I want to have equity. I want to have-"

Peter May (00:38:54):
I want to be a partner.

Peter May (00:38:56):
I want to be a partner. I started as an employee, but with equity. Then together, we built that company into the largest food service distributor in the Northeast.

Peter May (00:39:10):
Wow.

David Segal (00:39:11):
Which is a story unto itself, which we should talk about. I mean, here you are on a fast track to be a partner at one of the most prestigious accounting firms in the country. What was that phone call like to your parents where you're like, "I'm going to leave and join this young kid with big ambitions who owns a frozen food company."

Peter May (00:39:27):
Right. It's interesting. I told my parents about it. My father encouraged me because he had done the same thing.

David Segal (00:39:41):
Interesting.

Peter May (00:39:42):
He had left his accounting firm to join a client. He didn't know much about Nelson or what the opportunity could be. When I said to Leni, "I'm going to do this." I said, " If it doesn't work, I can always go back to being an accountant."

Peter May (00:40:05):
Got a piece of paper.

Peter May (00:40:05):
Can always fall back to being an accountant. It was somewhat of a risk, but it didn't seem like a risk. I was young and the world was in front of us, even though we had two kids by that time. Nelson was a, I knew he was going to be successful, and I liked the business that he had, because it was a solid business. We took that company public. The funniest part was we did an IPO. We merged into this little company that was public through the pink sheets, which we don't even remember what that was.

Peter May (00:40:47):
It was like an RTO kind of model?

Peter May (00:40:51):
Yes, but hardly. It was traded by appointment, that kind of stuff.

David Segal (00:40:58):
This is the one with the vending machines, or was it cable?

Peter May (00:41:00):
No, that was before. That was before that. This was was Flagstaff Food Service was the name of the company. We bought a company that made vending machines.

David Segal (00:41:12):
That was after, though.

Peter May (00:41:14):
After we took this company, after we did an IPO. We did an IPO to list on the American Stock Exchange and the entire, so we traveled to 26 cities to sell this IPO to raise $7 million.

Peter May (00:41:29):
Your road show.

Peter May (00:41:29):
Which today, if our road show raised $7 million, which today wouldn't be the fee on a deal. I mean, but when you think about the perspective.

Peter May (00:41:40):
Sure.

David Segal (00:41:41):
You used an investment bank, even though it was a small industry at that time, you did use one.

Peter May (00:41:47):
Actually, we used Kidder, Peabody and Wertheim & Company, two very prestigious firms.

Peter May (00:41:52):
Two Jewish kids are using this prestigious firm. It's hilarious.

Peter May (00:41:55):
Well, Wertheim was Jewish. The irony is, here's a great story, so we're going to price the deal and Fred Klingenstein at the time was the CEO of Wertheim, and they give us the price and we're not happy about it. His answer was, "You can't make chicken salad out of chicken shit." We said, "We're traveling 26 cities to sell our company and this is the what you look at. And you're sponsoring us and that was your attitude."

Peter May (00:42:27):
You have this IPO.

Peter May (00:42:29):
We have the IPO, we now have a little cash.

Peter May (00:42:32):
For you and Nelson, was that the first time you guys had real money?

Peter May (00:42:35):
Well, we didn't have the money.

Peter May (00:42:37):
Well, the company had the money.

Peter May (00:42:38):
The company had the money. No, we were still making salaries. Nelson always lived big because his wife was wealthy and he had made some money in the stock market. He lived uptown on 72nd Street in a co-op. I lived in Peter Cooper village, and it was-

Peter May (00:42:57):
Yeah. Different.

David Segal (00:42:57):
Did that make you impatient at all? I mean, there was such a discrepancy in your standard of living.

Peter May (00:43:02):
No, really not because I grew up, so it's interesting is he grew up in Brooklyn. I grew up ultimately in a big fancy house on the water in Hewlett Bay Park, which was the fancy part of Hewlett.

Peter May (00:43:19):
He had more of a chip on his shoulder.

Peter May (00:43:21):
He never really had a chip on his shoulder. He was hungrier than I was in that I knew what it was like, and I knew I'd get there. I had the confidence that I would be okay. I don't know that I ever had the expectation that it would be as big as it got, but as you get into the things you do, your appetites get there.

David Segal (00:43:43):
You weren't just Perseverant Pete, you were also patient Pete.

Peter May (00:43:47):
I don't know if I was patient. Persistent, not perseverant.

David Segal (00:43:50):
Persistent, yeah.

Peter May (00:43:51):
I don't know that I was patient, but I was... Patient might be the right word. That might be the right word. I was comfortable as long as I saw there was progress and there was light at the end of the tunnel of what we were building. We went through some really tough times. We bought this company called Coffee Mat, which made coffee vending machines and then had some accounting issues with it, which created a problem. Then we ended up selling the food service business and had some cash. That's how we met Mike Milken. At that time, Nelson was very friendly with Saul Steinberg who built Reliance and unfortunately passed away a few years ago.

Peter May (00:44:30):
An icon.

Peter May (00:44:30):
An icon, and a boy wonder kind of bad boy. He tried to take over Chemical Bank when he was 29. Nelson was very friendly with Saul. Saul introduced us to Mike Milken and mainly to invest because we had done this IPO and we had proceeds. Well, actually I'm going ahead of myself. We had done a financing for, we had Flagstaff, we sold Flagstaff, we had some cash from the sale of Flagstaff, and we met Milken to invest the money. We invested in junk bonds, which were fallen angels in those days. They were industrial, grade A bonds that had gotten in trouble, and that's why they were called junk bonds.

Peter May (00:45:34):
What was your first impression of Mike Milken when you first met him? I mean, he's a titan of industry.

Peter May (00:45:39):
Well, it was very early in the Milken days, so he was in California, so I didn't meet him right away. It was really just through the phone and whatever. Nelson had more of the relationship, but Milken was a force. I mean, we can get to that. He was just unbelievable. We had sold the company, and now we had this cash and we bought Coffee Mat, and now we were looking for business. This was also in the late seventies when the economy was in terrible shape. Paul Volcker was the chairman of the Federal Reserve.

David Segal (00:46:17):
Interest rates are through the roof.

Peter May (00:46:20):
Partially what happened is Flagstaff, which we sold, the food service business, was purchased in one of the first LBOs. It wasn't called LBOs in those days. It was just a highly leveraged transaction. The guys who bought it were some friends of ours, and the guy named Ben Jacobson, I don't know if you've run across him, but he went on to do some private equity stuff.

David Segal (00:46:45):
Just for the listers, LBO, leveraged buyout.

Peter May (00:46:47):
Leveraged Buyout. Okay. It was one of the first, now it's private equity. In those days, there were LBO funds, and so it was highly leveraged, but it was financed by what was then called GE Credit, became GE Capital. Now this is 1970. We sold the company in 1978, I think. They were paying three over prime. Prime rate was the way you measured your loan, and Prime was 21.

David Segal (00:47:19):
Wow.

Peter May (00:47:22):
They bought this business. They were paying 24% in interest in a company that had 1 or 2% margins.

David Segal (00:47:30):
And they put very little cash down. It's almost all-

Peter May (00:47:32):
They put very little cash in, they had very little equity. And not listening to us when they bought the company, they fired all of the management that we had built because they wanted to run it themselves. It was a penny business. You lose a case of peas-

David Segal (00:47:52):
That's it. Your profit to your revenue-

Peter May (00:47:55):
... and you lost the profit for the month. They ended up going bankrupt, and so GE came to us and said, "We want you to help us work out of this bankruptcy." At the time when we had sold the company, we sold it for like $23 million, and we had taken back a million dollar note, which was subordinated to GE's debt. We said to GE, "Okay, we'll come in and try to get your money back, but we want our note [inaudible 00:48:26] pursuit of you." They said, "Okay."

David Segal (00:48:30):
At this point you had moved on, you took your cash and you had bought Coffee-

Peter May (00:48:33):
Well, we still had this corpus, this was now called Trafalgar Industries. I mean, we had so many different names of the companies over the years.

David Segal (00:48:41):
All with a T.

Peter May (00:48:42):
It owned Coffee Mat and it had some cash, but Coffee Mat was doing badly. We had taken control of a small coal company helping out some friends, and that was also not doing very well. The world was really in trouble.

David Segal (00:49:02):
At this moment, you're not actively running these companies. You have management in place in them?

Peter May (00:49:06):
We had management in place, but we were really-

David Segal (00:49:08):
Hands off.

Peter May (00:49:10):
It was sort of like a conglomerate, so we were very involved in the operations of the business.

David Segal (00:49:16):
You had the coffee company-

Peter May (00:49:16):
They asked you to come back in.

David Segal (00:49:19):
They asked you to come back in.

Peter May (00:49:19):
They asked us to come back in. We ended up, and this was part of the philosophy that has now become the philosophy at Triad in our current business. We looked at these companies and what was left of the businesses that we had put together, and the bank's first reaction, as is always a bank's reaction, is sell the good businesses and write off the rest. Our view was absolutely the opposite. Let's fund the good businesses and get rid of the junk. We convinced GE to over fund so that we could rebuild the company, the pieces of Flagstaff that we thought had.

Peter May (00:50:03):
... company, the pieces of Flagstaff that we thought had value, and we got rid of the rest of it, and to make a long story short, we were successful, we were able to sell those companies for a good ... GE got all its money back, and we got our million dollar loan back-

David Segal (00:50:16):
Did you shed the ones that weren't working? Like you sold Coffee-

Peter May (00:50:19):
No, Coffee Mat we still had in-

David Segal (00:50:21):
You never sold for a loss.

Peter May (00:50:24):
... got rid of our other company.

David Segal (00:50:27):
Yeah.

Peter May (00:50:27):
We were doing this on the side, because we didn't have any income-

David Segal (00:50:30):
Right.

Peter May (00:50:31):
Because we couldn't take a salary out of Flagstaff Triangle, because ... Trafalgar, at that time, because we weren't making enough money, so when that happened, we started a consulting business called MPN Group, and we took on a bunch of other companies, mainly in the food service distribution. We did some work for Squid that owned a company that made pastries, and we did some work for a few other businesses.

David Segal (00:51:03):
Did anyone ever turn to you and say, "Peter, you've got coffee, pastries, you're all over the place. What are you doing here?"

Peter May (00:51:11):
You know what? When you're in the middle of trying to stay alive-

David Segal (00:51:14):
It doesn't matter.

Peter May (00:51:14):
It doesn't matter. You're fighting for everything that you can get, and everything you can do, and while we're doing this, we're also going to the coal mines and making sure that the little coal company that we had an investment in was working-

David Segal (00:51:31):
So, there's this term that we've heard thrown around when it comes to you and Nelson, which is "constructive capitalism."

Peter May (00:51:36):
Well, but that's part of Trian Partners. Okay?

David Segal (00:51:42):
What is that? What is constructive capitalism?

Peter May (00:51:47):
It's not necessarily constructive capitalism. It's constructive investment. So, we got lumped ... We're jumping ahead here, but when we started the fund, and there's a long story to get to when we started the fund, we got lumped into a group of so-called activists, which meant that we were taking a position in the company, and rattling the cage.

David Segal (00:52:17):
Sure. Writing whitepapers [inaudible 00:52:18].

Peter May (00:52:19):
But we never did that. Okay? We never wrote whitepapers ... We wrote whitepapers, but we never threatened anybody. Our objective was to get ... Our investments were only in companies that we thought were good companies that were either poorly managed, under-managed, or missing opportunities, and so the constructive, we called ourselves constructivists, because our view was we're trying to rebuild the company in a way that is entrepreneurial, try to get management ... And these were decent-sized companies. Try to get management to think as entrepreneurs. Think long-term, what would you do if you owned 100% of the company? So, the constructive part of it is we're not destructive. We're not trying ... The activists in those days were, "Leverage the company and sell a division and buy back stock and make the stock go up."

David Segal (00:53:14):
Yeah, and you weren't short sellers. You wanted-

Peter May (00:53:19):
No. We wanted to create value in the business with a much longer horizon.

David Segal (00:53:21):
Yeah. People talk about fortune cookie mottoes or lessons and stuff, but one of the things that Dave and I researched, there were these mugs that you and Nelson had that said-

David Segal (00:53:34):
Expenses down, sales up-

Peter May (00:53:35):
No, "Sales up, expenses down," on one side and, "Cash is king" on the other side.

David Segal (00:53:39):
We love it, and I know that sounds almost like a fortune cookie piece of advice but that's actually how you ran the business. Expenses down-

Peter May (00:53:46):
... ran every business.

David Segal (00:53:47):
Cash is king.

Peter May (00:53:47):
It's how we ran every business up to that point. There's this whole period where we built Triangle Industries into a major company, which is pre- Triad, which goes back to now after Coffee Mat and whatever-

David Segal (00:54:12):
You raise a fund.

Peter May (00:54:13):
No. We didn't raise a fund. We never raised a fund. When we sold ... We had some money, and we were doing these consulting stuff, and we decided our real objective was to try to figure out how to invest in a company that we could really build into a big company, and by that time, we got to know Milken well, and we had taken over a small company called Triangle Industries, which was in the wire and cable manufacturing business, and it also owned Row, which was a vending manufacturer.

(00:54:54):
We got to that because in Trafalgar, we owned Coffee Mat, which made coffee machines.

David Segal (00:55:01):
Got it.

Peter May (00:55:02):
And the guy who was running Triangle, the CEO of Triangle came to us to buy Coffee Mat, and he had just taken over Triangle, and he was a character. We said to him, "We don't think you really like the business you're in. Why don't you sell us Triangle Industries and instead of buying Coffee Mat?" And it ended up that we figured out how can we raise the money? And so we leveraged everything we had.

David Segal (00:55:31):
Wow. You went all-in.

Peter May (00:55:34):
We went all-in. Nelson had more money than I did, so he ended up with a bigger piece of it. We took every dollar that we had, and we bought his equity, so we bought like 26% of the company. We got a margin loan from Bankers Trust, and we got a personal unsecured loan secured by my house, my apartment, and Nelson's house, he had a bigger house.

David Segal (00:56:07):
Oh, wow.

Peter May (00:56:08):
And from Manufacturers Hanover Trust, and we took control of Triangle Industries.

David Segal (00:56:14):
This is sort of-

Peter May (00:56:14):
In 1983.

David Segal (00:56:14):
[inaudible 00:56:17]. This is like meshuga.

Peter May (00:56:14):
He was crazy.

David Segal (00:56:14):
[inaudible 00:56:20] why do you do this?

Peter May (00:56:19):
I remember I went home, Phil Lenny, we had at that time, we were now living-

David Segal (00:56:24):
Lenny must have thought you were nuts, because you're well-off at this point. Right?

Peter May (00:56:28):
I was comfortable. I was living in a co-op on 71st and 3rd, a nice apartment.

David Segal (00:56:33):
Nelson's certainly comfortable.

Peter May (00:56:34):
Nelson was ... I forgot but Nelson was living on 5th Avenue. Yeah. We were okay, and making a living. I said to Lenny, "I'm putting it all in. We're taking control of this company, we think we can make something out of it, and if it doesn't work"-

David Segal (00:56:57):
[inaudible 00:56:59].

Peter May (00:57:03):
I had that conversation. I remember sitting in our little den in the apartment-

David Segal (00:57:08):
It's timeless across every Jewish generation. I can always fall back on my law degree, my medicine degree-

Peter May (00:57:13):
My family, I kept up my CPA degree.

David Segal (00:57:17):
So, what do you see ... It's a vending machine business. What's so special?

Peter May (00:57:21):
Here's what it was, and the day the deal closed ... The dynamics of getting that deal closed were crazy, because the board ... It was a New York Stock Exchange company, Triangle Industries, and the board was very white shoe, and we wanted control of the board. They said, "No way."

David Segal (00:57:40):
How old are you at this point?

Peter May (00:57:40):
42-

David Segal (00:57:40):
Pushing 40? Yeah. Okay.

Peter May (00:57:47):
They agreed to allow us to go on the board for the guy who was CEO to stay CEO, to become chairman, Nelson became CEO, I became COO for six months to see if we could keep the company going-

David Segal (00:58:11):
Not only did you put everything on the line, not to buy the whole company, you bought 26% of the company.

Peter May (00:58:15):
We bought 29%, and-

David Segal (00:58:15):
[inaudible 00:58:16].

Peter May (00:58:18):
It was a public company, and we had the responsibility-

David Segal (00:58:20):
Wow.

Peter May (00:58:21):
... and we moved our offices. The headquarters of the company were in New Brunswick, New Jersey, so we moved out to New Brunswick.

David Segal (00:58:30):
When you put all your chips in, do you know that you're going to be CEO and COO? Or you don't even know at that-

Peter May (00:58:34):
Well, no. We knew-

David Segal (00:58:35):
That's part of the deal?

Peter May (00:58:36):
That was the proposal-

David Segal (00:58:37):
Got it.

Peter May (00:58:38):
... and we wouldn't have done the deal, if we didn't have-

David Segal (00:58:40):
Got it.

Peter May (00:58:40):
...the ability to have influence.

David Segal (00:58:44):
Yeah.

Peter May (00:58:46):
The first thing we did was start looking at the businesses that they had, and the wire and cable company was losing money, and the vending machine company, the day we closed, the guy tells us, "By the way, the biggest plant in the vending machine business is now on strike," and that strike lasted a year, which was wonderful, but we used it as an opportunity to really restructure that business.

(00:59:11):
We ended up in the first year, rolling up our sleeves, getting to know those businesses, and improving them. We used the vending machine business to get into some of the gaming we created ... They also made jukeboxes, so we created a video jukebox, which didn't work all the time-

David Segal (00:59:34):
Could have been Spotify.

Peter May (00:59:35):
I wish.

David Segal (00:59:41):
But that model, you would continue to use, which is find companies-

Peter May (00:59:44):
Figure out how to make them better, but we also knew neither the vending business nor the wire and cable business were businesses that really had the opportunity to grow much further than they were. The wire and cable business was really a commodity business, so we figured we'd be much better off using the balance sheet, leveraging the company, and figuring out another direction to go.

(01:00:12):
That was when Milken was now in his heyday, so we said, "Okay, let's see if we can raise a blind pool. Let's see if we can raise funds," so we went to Milken first, and he wanted us to do a senior subordinated note, and we didn't want to do that. We wanted to do something junior, so that we'd have more flexibility and capital structure.

(01:00:38):
At that time, L.F. Rothschild, which doesn't exist anymore, was another bank that was starting to do some high yield kind of stuff, and they did our first deal.

David Segal (01:00:47):
Wow.

Peter May (01:00:48):
And we raised with them, $140 million, and-

David Segal (01:00:52):
Which is an incredible amount of money.

Peter May (01:00:52):
Which was a huge amount of money, considering the market gap of Triangle was $45 billion-

David Segal (01:00:59):
Yeah. Here you've got two young guys, who have leveraged everything on their personal side.

Peter May (01:01:03):
Right.

David Segal (01:01:04):
Who are now asking for a ton of leverage on a business.

Peter May (01:01:06):
Right.

David Segal (01:01:07):
To take a business and transform it into an entire other business-

Peter May (01:01:09):
You've got it.

David Segal (01:01:10):
Yeah.

Peter May (01:01:10):
You've got it. This was pyramids on pyramids but with legitimate cashflows. Okay? So, Triangle had enough of a cashflow to support the subordinated debt, and so now we go to Milken, now Milken was furious, because this was the one deal he didn't-

David Segal (01:01:28):
And Rothschild got it.

Peter May (01:01:29):
Right, because Rothschild got it. He comes to us, and now we do a senior subordinated. Now we have almost $280 million. Now we start looking for a deal, and on the cover of Triangle Industries annual report, in those days, you printed annual reports. On the cover of the report, we said, "We want Triangle Industries to become a major industrial force." That was our objective.

David Segal (01:01:59):
$300 million at 20% interest rates?

Peter May (01:02:02):
No. No. No. 15%.

David Segal (01:02:02):
15%? Okay. That's much better. Much better. Wow.

Peter May (01:02:06):
No. This was good financing. So, now we identify National Can, which was in the middle of a fight ... I don't know if you know the name Victor Posner, but Victor Posner was ... If you ever do any research, he was the villain of Wall Street. Okay? He was a guy-

David Segal (01:02:26):
What made him like that?

Peter May (01:02:27):
Oh, he bought all these companies and totally raped them. He would take huge compensation, pull them apart-

David Segal (01:02:36):
That's sort of the opposite of what you guys want to do-

Peter May (01:02:38):
Exactly.

David Segal (01:02:38):
The first corporate raider. Yeah.

Peter May (01:02:40):
He was a terrible guy, but he owned 40 some odd percent of National Can but he didn't have control. He had no board seats. He had nothing. The company, National Can, was trying to get away from him, so they were doing an ESOP- supported tender offer to-

David Segal (01:03:03):
Which is the employees basically putting money in.

Peter May (01:03:03):
Employees plus financing from Salomon Brothers, at the time, for 52% of the company, so he would be sterilized.

David Segal (01:03:14):
Got it.

Peter May (01:03:15):
We said, "We want ..." He thought he was going to get that deal done. We went to Milken and said, "Okay, we think we can take the whole company over," and so we did a tender offer for 100% of the company. We topped the company hat.

(01:03:36):
We also said, "We need some additional financing to do this deal," and, at that time, most of the deals that Drexel was financing never got done. People were basically just making arbitrage on the stock they bought, and then whatever, and this was one of the first deals that actually got closed, and, of course, Milken and his team were really nervous that it was going to be successful.

(01:04:02):
But we ended up buying the company, and then we realized that we started to really get into it in great detail, and roll up our sleeves, and our view was National Can was a really good company, its primary business was beverage cans, and this was at the time where Coke had come out with Diet Coke, and Pepsi was growing, and Anheuser-Busch was the biggest customer, and so it was-

David Segal (01:04:36):
A good business.

Peter May (01:04:37):
It was a good business, but it was very narrowly focused, and our view was, "Okay, how can we take this business and make it into a major packaging company?"

David Segal (01:04:46):
Yeah.

Peter May (01:04:48):
They were only domestic, so the first thing we did was start looking international, and we were able to follow Coke, as it went around and, at that time, it was a period of time where internationally ... Two piece beverage cans, which is an aluminum can that's extruded with a top, those are the two pieces, were the primary beverage can, very efficiently manufactured in the U.S., but, internationally, it was all returnable glass bottles, so we followed Coke as they started to expand internationally, and we built can plants around them.

David Segal (01:05:30):
Now you have a blind pool of money. Correct?

Peter May (01:05:33):
Well, not anymore. Now we don't have any money.

David Segal (01:05:35):
No. No. Before this deal.

Peter May (01:05:36):
[inaudible 01:05:37] all in this company.

David Segal (01:05:37):
Before you buy American Can, you can basically go into any industry you want with that money?

Peter May (01:05:42):
Yeah. We were totally opportunistic. What's something in play?

David Segal (01:05:47):
You can go anywhere ... When you go to find a deal, is that how you start? You say, "What's in play?" And you go from there? Or did you go and say, "Coke is the gold rush, and we're going to sell the picks and the cans are the picks"-

Peter May (01:05:58):
No. What's available? What's in play? At that time. Remember-

David Segal (01:06:02):
You go to Milken, you go to bankers-

Peter May (01:06:05):
We're nobodies. Nobody knew us. We had no cred. We were just guys trying to figure out-

David Segal (01:06:11):
You're like, "I'm going to make chicken salad or chicken shit." Yeah.

Peter May (01:06:13):
You got it. Had to do something like that, and so we started to build an international ... We also said, "We need to be much broader-based in packaging, not just cans," because, at that time, Coke was busy buying up its bottlers, and Anheuser-Busch, which was our single-largest customer, was starting to have their own can plants, so all of a sudden, we're seeing a consolidation of our customer base, which was going to put a lot of pressure on margins.

David Segal (01:06:48):
Sure.

Peter May (01:06:48):
And so we needed to figure out how can we diversify? We also did some very entrepreneurial things. We went to Alcoa, who we were Alcoa's largest customer-

David Segal (01:06:58):
The aluminum company?

Peter May (01:06:58):
We were the largest aluminum consumers in the world-

David Segal (01:07:01):
Wow.

Peter May (01:07:01):
At that point.

David Segal (01:07:03):
Wow.

Peter May (01:07:03):
So, we went to Alcoa, and they were given ... At the time, it was 210 terms, and we said, "We need a loan, because we're a highly leveraged company."

David Segal (01:07:17):
Yup.

Peter May (01:07:18):
They said, "We can't give you a loan, but we can give you 90 day terms," which was huge in terms of-

David Segal (01:07:23):
Of course. At 50% interest.

Peter May (01:07:24):
No, because we were paying 15% interest, and we knew this was interest-free 90 day terms, this was a big deal.

David Segal (01:07:31):
Right.

Peter May (01:07:32):
We also found the company had an over-funded pension plan, which we were able to take some cash out of, which ... So, we started to pay back some of our debt right away, which was important-

David Segal (01:07:49):
Are you and Nelson aligned on this whole thing?

Peter May (01:07:49):
Absolutely.

David Segal (01:07:49):
That the partnership was really working-

Peter May (01:07:50):
We were joined at the hip. We did everything together.

David Segal (01:07:53):
You knew the ambition was the same.

Peter May (01:07:55):
Absolutely. We were just totally focused on how to make this thing better.

David Segal (01:07:58):
What was your role relative to Nelson's role? Were you operations and he was sort of the storyteller-

Peter May (01:08:04):
Well, they kind of bled. In those days, we were both doing everything. I would do the detail on all the financings, and negotiate the covenants and all of that, and he got very involved in some of the sales stuff. When we took over American Cans packaging, he had to go meet with Procter & Gamble, because we were a supplier to their toothpaste tubes, and they were worried about these entrepreneurs who were taking over this company.

(01:08:40):
He was more Mr. Outside.

David Segal (01:08:41):
Okay.

Peter May (01:08:43):
Okay? But in terms of the strategy, we were totally aligned. Then we said, "Okay, how do we make this into a big packaging company?" Again, everything is opportunistic in this world, and at that time, now we're at Milken Conference and we meet Gerry Tsai, who I don't know if you know that name, but another legend on Wall Street, who had been first in a major well-known investor and ended up becoming CEO of American Can Company.

David Segal (01:09:20):
Okay.

Peter May (01:09:20):
He and others had taken American Can Company into becoming a major conglomerate, and record distribution company, and he had people at an insurance company, and then he bought Commercial Credit, and then he bought Smith Barney, and he wanted to turn it into a financial services business, and the packaging business was like an orphan, and they used the cashflow from packaging-

David Segal (01:09:52):
To build a finance business.

Peter May (01:09:53):
For all these other businesses but totally just let the packaging company go fallow.

David Segal (01:10:03):
For you, that was an opportunity.

Peter May (01:10:03):
And so we got to know Gerry at a Milken Conference-

David Segal (01:10:07):
Oh, the Milken Conference, was that-

Peter May (01:10:10):
That was the Creditors Ball.

David Segal (01:10:10):
Wow.

Peter May (01:10:12):
Oh, yeah. We went every year. It was a lot of fun.

David Segal (01:10:14):
It was the thing to do.

Peter May (01:10:16):
Yes. Yeah. You had to do it.

David Segal (01:10:18):
Sure.

Peter May (01:10:20):
It was fun.

David Segal (01:10:20):
Amazing. Yeah.

Peter May (01:10:21):
So, Gerry was about to become CEO of American Can, and he said to us, " Assuming I become CEO, I'll sell you the packaging business," and so he became CEO, and we then bought American Can's packaging group, which consisted of a food can business that was terrible, that had been totally neglected but a plastics business where they made much more value-added stuff, including they invented the toothpaste tube that was ... Now the current tube was called the Glaminate Tube-

David Segal (01:11:04):
The Glaminate Tube? Wow.

Peter May (01:11:04):
Glaminate Tube.

David Segal (01:11:07):
I didn't know there was a name for that-

Peter May (01:11:08):
They invented the squeezable Heinz ketchup bottle.

David Segal (01:11:12):
That's a big one.

Peter May (01:11:13):
Yup.

David Segal (01:11:14):
Solved a major problem.

Peter May (01:11:16):
No. Absolutely. So, they had value-added products. Again, that they hadn't really developed, because they were using the cashflow for their diversification, and so we started to invest in those businesses, and we combined American Can's can business with National's, took $130 million of costs out, like getting rid of some redundant plants-

David Segal (01:11:47):
Wow.

Peter May (01:11:47):
... and some duplicate overheads, and built it into what became the largest packaging company in the world.

David Segal (01:11:53):
Wow. You did what the coffee mug said. Right? Sales up, costs down-

Peter May (01:11:56):
Exactly.

David Segal (01:11:57):
You finally went narrow and deep versus-

Peter May (01:11:59):
Exactly. It was blocking and tackling, but it was having a vision to make a multinational business that was really dominant in the industry.

David Segal (01:12:09):
I want to talk about that for a sec, because you said everything in this world is opportunistic. How did you balance that where listening to your story, in one sense, you guys are by the seat of your pants in many ways? You're coffee, you're over here, you're over there. In many ways, you do have a long-term strategic vision. How did-

Peter May (01:12:25):
Well, the long-term strategic vision was always about the business we were in-

David Segal (01:12:31):
At the time. Whatever that was.

Peter May (01:12:32):
Whatever that was. In other words, whatever we were doing, we wanted it to really be an important entity in its field.

David Segal (01:12:43):
Right.

Peter May (01:12:44):
Even when it was the food service business, it was a couple little locations. We wanted it to be the most important food service distribution company, and so our objective was always, " Look at what you've got and how do you make it more important?"

David Segal (01:13:03):
Sure.

Peter May (01:13:03):
And really make a difference. In the packaging business, the timing, it was very good. We bought the businesses at pretty low multiples, because they weren't much in favor, and we took a lot of costs out. When we bought ... Just from the financial dynamics, National Can had about $60 million in EBIT when we bought it. American Can was break even in EBIT. EBITDA was not a term in those days.

David Segal (01:13:38):
We had a conversation over dinner last night. I'm going to pause you here for a second. Right now, we all talk about EBITDA. Right? The D and the A is depreciation amortization.

Peter May (01:13:46):
Right.

David Segal (01:13:46):
But you and Nelson are famous that you never even thought about depreciation amortization. It was all about-

Peter May (01:13:51):
Well, we do now, because of the businesses we invest in-

David Segal (01:13:54):
Why at the time-

Peter May (01:13:55):
Why?

David Segal (01:13:55):
... was that the case?

Peter May (01:13:56):
Because the [inaudible 01:13:57] didn't belong to you.

David Segal (01:13:57):
Yeah. You eventually-

Peter May (01:13:58):
When you're an industrial business, you got to spend the DA. You got to spend the depreciation. You got to reinvest in capital in your businesses, so if you look at EBITDA as free cashflow, it's not free cashflow.

David Segal (01:14:13):
Yeah.

Peter May (01:14:13):
Because you got to spend the capital. So, we looked at EBIT, because the depreciation-

David Segal (01:14:19):
That was yours.

Peter May (01:14:20):
It was ours.

David Segal (01:14:20):
That's right.

Peter May (01:14:21):
The depreciation had to go back into the business. In fact, the way we built that company is the depreciation, at the time, was maybe $60 million, $70 million. We took capital spending in our last year up to $300 million, because we opened the floodgates. We started to get ... These were two stodgy old businesses run by relatively conservative management teams. We combined the businesses, we backed the guy who ran National Can, because there wasn't really any senior management left at American Can. He was the better horse, but he was a guy who thought he was the only one who knew everything about what was going on in the business, because everybody else reported directly to him-

Peter May (01:15:03):
Everything about what was going on in the business, he goes, everybody else reported directly to him. And fortunately, he liked to spend winters in Florida. So when he was in Florida, we would get all the senior management and say, "Okay, tell us what you want to do with your business-"

Peter May (01:15:16):
Right.

Peter May (01:15:17):
The glass business, the can business, whatever. And they would come up with all these great ideas-

Peter May (01:15:23):
That he was blocking. Sure.

Peter May (01:15:24):
That he was blocking. Because he didn't want to spend more than depreciation-

David Segal (01:15:28):
He wanted to invest in the business.

Peter May (01:15:28):
In CapEx.

David Segal (01:15:28):
And you didn't care who was in charge. You just cared about which was the best idea.

Peter May (01:15:30):
What was going to be the best idea. So we said, okay, let's get a batting average of these guys. And if they can get the returns they're talking about, we'll do it. And by the third year we realized these guys really knew what they were doing. And we built this business around them.

Peter May (01:15:47):
Around them.

Peter May (01:15:47):
So it became, the sales, originally, of National Can was like a billion two, American Can was about a billion. By the time we sold the company in 1988, it was four and a half billion, but the EBIT was 400 million.

David Segal (01:16:04):
Wow. But hold on. The DAs not necessarily, so for people listening, it's the idea of depreciation, amortization is if I have a machine and I buy it once, I have to assume I need to buy it again in 10 years. But in what you're saying here, you were able to make those capital investments not just as a maintenance investment, but more as-

Peter May (01:16:23):
The DA was maintenance. The appreciation part was pretty much keeping it status quo.

David Segal (01:16:31):
Right. You went above and beyond. I got it.

Peter May (01:16:34):
We went way above and beyond it because...

Peter May (01:16:36):
But there's something else that, there's a bit of a theme here and we got talk about Wendy's and Tim Horton's, and there's all this stuff we want to talk about here. But before I do that, one of the things that David and I heard is we did our research on you, and you in particular, but also Nelson as well. There was this one line that we heard over and over again, which was that, "They don't need to be right. They much prefer to be rich."

Peter May (01:16:55):
That's Nelson's line.

Peter May (01:16:56):
And I want to-

Peter May (01:16:57):
Nelson's line was always, "I'd rather be rich than right."

Peter May (01:16:59):
Can you explain that?

Peter May (01:17:00):
Well, the idea was, "Let's try stuff and if it doesn't work, let's go on to the next thing." Or "I don't have the best ideas, but I want to hear of other people's ideas." And our objective is to be successful. It isn't to prove our point."

Peter May (01:17:19):
Right. And that carried you throughout the entire journey.

Peter May (01:17:21):
That's absolutely critical in any ... it should carry everybody. I mean, if you're going to take a risk, it's got to be calculated. But you also have to recognize that not every idea works. Not everybody has the best ideas, has the only good ideas.

David Segal (01:17:38):
Sure.

Peter May (01:17:41):
And sometimes half of a loaf is better than none. It's all these cliches.

Peter May (01:17:48):
But you took your ego out of it. It wasn't about Nelson or Peter. It was about-

Peter May (01:17:53):
No, it was what's the best idea and how is it going to work and show it to me and prove it.

Peter May (01:17:57):
Right.

Peter May (01:17:58):
And so, we always-

David Segal (01:18:00):
Did any of these businesses ever not work?

Peter May (01:18:01):
Oh, yeah.

David Segal (01:18:01):
Did you ever have to sell some in the lawsuit?

Peter May (01:18:02):
We had some duds.

David Segal (01:18:02):
You did?

Peter May (01:18:03):
Yeah. We've had some duds. We've had some pieces. We had more afterwards in trying. We've had some few investments that didn't work for various different reasons. But most of the time we've done pretty good homework. And you try to figure out how to weave, how to go make a left turn if the-

David Segal (01:18:28):
Is that harder? I mean, we're talking about this idea of I'd rather be rich than right. Is it easier to put your ego aside when you feel someone else has a better idea versus, say, admit defeat in a business that you had a very strong conviction in and that you spent time and energy on, but it just didn't work for a variety of reasons?

Peter May (01:18:46):
I don't think either one of us looked back much. I think you face what you got and you move on to the next thing. And we've been lucky that most of it's worked. So if you spend a lot of time davening over what you did wrong, it doesn't really accomplish a lot. I mean, you learn from every mistake you make. I mean, one of the things we learned early on is with when you take on a lot of leverage, you got to have a lot of liquidity. And a couple of situations that we had that didn't do well were because we got caught from a cashflow point of view where-

David Segal (01:19:35):
You had a call.

Peter May (01:19:36):
... where the business might've been okay, but you didn't have enough time to work your way through it and so ...

David Segal (01:19:44):
The debt got called and you're out of money.

Peter May (01:19:45):
Exactly.

David Segal (01:19:46):
I want to talk a little bit about this project of Big Shot, and a lot of it has to do with archiving stories of these incredible entrepreneurs like you, Peter. But there's sort of a through line throughout all these stories. You know some of our past guests, I know you're very close with some of them. But there's a sense of chutzpah here. And I'm curious for you, what does chutzpah mean to you when you hear it as ... You're a proud Jewish leader and entrepreneur, but what does chutzpah mean to you and why is it so baked into the Jewish culture, in your view?

Peter May (01:20:20):
Well, chutzpah is putting yourself out to just take a risk, to take advantage. It can be used pejoratively, too.

David Segal (01:20:32):
Sure, of course, yeah.

Peter May (01:20:35):
How dare you? Yeah, the nerve. The nerve of that guy.

Peter May (01:20:37):
Right, exactly. But to me, it's the same as do more than is expected of you. It's just go after something and be somewhat myopic about trying to make sure that it's going to get done. And I think that part of the Jewish psyche is there's always this fear that somebody's after you or that you're going to be taken out. And I don't really feel that way. Maybe right now I do with what's going on in the Middle East.

David Segal (01:21:12):
It's a scary time right now.

Peter May (01:21:14):
In Israel, which is really scary and very worrisome. And I spent a lot of my philanthropic world in the Jewish world. But I think that there's just part of, because we're a minority of such a small ... I mean such a small minority who have been uniquely successful in the context of the scale of the world, that there's always this feeling that we got to do more. And that's just part of the Jewish [foreign language 01:21:50].

David Segal (01:21:51):
I know. And that's sort of the irony of the whole thing is whether you're in your forties like us or whether you're in your sixties or seventies or eighties or nineties, this feeling of-

Peter May (01:22:02):
I'm 81.

Peter May (01:22:02):
You're still a young man, but with some of our other guests who are in their nineties, that this feeling of, "Am I doing enough? Have I done enough? Do I have enough?" Am I-

David Segal (01:22:09):
Have I made it?

Peter May (01:22:10):
"Have I made it?" I mean, when did you know you made it?

Peter May (01:22:13):
I don't know if I have. You never have enough. I mean, I'm sitting in a world today where I'm very successful. And I look at the amount of money that some of my peers have made who started out pretty much same time, who have these multi-billions of dollars. And I don't even ... first of all, I don't know what to do with that kind. I give away a lot more than I spend because it's important to me. But I don't think you ever really feel like you've made it. I think you feel like you've ... I mean, I'm reasonably sanguine about who I am and what I've accomplished in my life. And it's not strictly related to all the things we've been talking about in terms of the business side. Probably the most rewarding part of my life has been some of the philanthropic stuff I've done, particularly the rebuild of Mount Sinai health system which today is one of the powerhouses in healthcare and certainly in New York and in the country from which was in pretty bad shape when I-

Peter May (01:23:31):
Well, you took an approach called engaged. What we now understand is the term that you've said that you've used is engaged philanthropy.

Peter May (01:23:39):
Engaged philanthropy.

Peter May (01:23:40):
And engaged philanthropy, to us at least, and please help us understand it because frankly, one day if we're lucky enough to do stuff like that, David and I, we'd love to take a cue from you, which is, you've taken a very, dare I say, entrepreneurial approach.

Peter May (01:23:52):
Absolutely.

David Segal (01:23:53):
You're a constructive activist for Sinai Health, which was in trouble until today.

Peter May (01:23:56):
I mean, you went into these hospitals and said, "Look, I'm going to give money, but I'm also going to give my time, my strategy, my entrepreneurial instincts to help this." Why?

Peter May (01:24:06):
Well, that's my hope. So I grew up, again, my family was always ... my mother was a social worker. She was early in the not-for-profit world, first Jewish president of a temple, very active in the Jewish community. And my father wasn't an active philanthropist, but he gave money away. And I always was brought up that when you have the opportunity to give back, but I early on realized that you get to a certain point in your life where you can write a check and it's easy and it's important. And every, not-for-profit organization needs supporters, and the people who are just willing to write a check, and that's it.

(01:24:53):
But if you really want to make a difference, if you want to have impact, then you have to use your own background, your own experience, your own capabilities to work on an organization that you think can use those talents and make a difference. And so, I've always approached, I started first with my kid's school like most people do. I got on the board or gave money and started raising money for the school. But then I said, "Okay, well how do we improve what the school's doing?" Well, I didn't get into the education side, but it was the Ethical Cultural School of Fieldston, at the time was run by Ethical Cultural Society which was kind of a confusing thing. And we helped separate the school from the society, which was valuable.

(01:25:50):
But I've always approached philanthropy the same way that I want to understand what the organization's doing. If I believe in their mission, how do we make it better? How do we improve it? Sinai was unique in that they came to me. I was on the Board of Sinai for a while, and I got into it because they saved my daughter's life as a newborn.

David Segal (01:26:17):
Wow.

Peter May (01:26:18):
She had a blood issue that Sinai had to change her blood several times, and she wouldn't have survived if we hadn't been in the Sinai neonatal. So that's a whole another story that I don't need to go into. But so I felt a kinship and a need to give back to Sinai, and early on started making contributions.

(01:26:38):
When I went on the board, I wasn't ... it was the time we were building Triangle, and it was a very busy time for me career-wise.

Peter May (01:26:49):
Yeah, you were getting started, actually.

Peter May (01:26:51):
But then as I started to become more successful or things got a little more stable, Sinai was in more and more difficulty. And a group came to me because by that time we had a reputation of doing turnarounds and said, "We need you to get involved on the finance committee and see what's going on." And to make a long story short, I ended up becoming Chairman using my skillset again. It was at a time, Sinai had been, was always a great medical center. It was founded as the Jewish Hospital in 1852 by a group of philanthropists, because Jews couldn't be treated in anything but a state institution in those days. And Jewish doctors couldn't practice in any private hospitals.

Peter May (01:27:44):
So they built their own.

David Segal (01:27:45):
So they built their own.

Peter May (01:27:45):
Their own. You built their

Peter May (01:27:47):
So they built their own. And for many, many years, it was always a place of great research, even though it didn't have a medical school. And in 1968, they decided, okay, the prejudice is gone, we can't retain our people unless we have a medical school. It's the only hospital that created a medical school. And it was always a great institution, but it had some poor leadership over time, and had gotten into financial difficulties as New York had a lot of competition. And the approach at the time before I became Chairman was, "What can we cut?" And again, our philosophy is you can't cut your way out of a problem. You got to invest your way out of a problem. And that's what we did at Sinai. And we fortunately had some assets that we could mortgage, and we reinvested.

Peter May (01:28:37):
And you reshaped it.

Peter May (01:28:38):
And rebuilt it.

Peter May (01:28:40):
It's incredible, [inaudible 01:28:41]

David Segal (01:28:41):
Did you also cut, though? I mean, sales up, expenses down, did you invest [inaudible 01:28:45]

Peter May (01:28:44):
In that case, there wasn't a lot to cut. In that case, we really had to invest. We had to really start rebuilding and investing. We invested in stuff like technology, which resulted in being much more efficient. So there were savings in terms of head count related to billing and stuff like that, but more of it was rebuilt.

David Segal (01:29:12):
What's the impact of Sinai today on the broader New York worldwide community?

Peter May (01:29:16):
Sinai is the largest healthcare, the largest medical center in New York City.

Peter May (01:29:22):
Not Jewish, just ...

David Segal (01:29:23):
No, all walks of life.

Peter May (01:29:26):
It's a medical school, which was number 45 in NIH grants when I came in, is now in the top 10, and number 3 in dollars per investigator because it's a smaller school.

David Segal (01:29:41):
Sure.

Peter May (01:29:42):
It's considered one of the finest academic health centers in the country.

David Segal (01:29:46):
It's amazing. So one of the things ... We have to let you go soon, otherwise we'll take all your time, but there seems to be sort of this, we talked a bit about this sort of latent survival mode that all of us are in as Jews.

Peter May (01:29:58):
Right.

David Segal (01:29:58):
And I'm curious, if speaking to the next generation of people that want to be Peter, that want to have your success, not even your success from a business perspective, your success and impact, just from a societal perspective, what would you say to that next generation of young people, Jewish or not, who want to sort of emulate a similar career path and a similar impact that Peter May has had?

Peter May (01:30:24):
Well, from a career path, you got to figure something that you really like to do. You got to get up in the morning and really be excited that you go into the office or you're going to wherever you're going, and Zoom. But I'm not a big believer in, I mean ...

David Segal (01:30:44):
You like it in person?

Peter May (01:30:45):
I like it in person. Zoom has been great, and we would never have gotten through COVID without that.

David Segal (01:30:49):
We could have many more guests if we did this virtually, but there's something different if you're sitting here with us.

Peter May (01:30:53):
There's no question. And you can't train and you can't give culture absorption to anybody unless you're together. But putting that aside ... so, find something that you really like to do because it's critical that you enjoy going to work. Find people that you like to be with and you enjoy, and that you can learn from and work with in a way that gives you satisfaction, and that are willing to appreciate what you have to do. So in a business point of view, I think it's one of the biggest things that I find frustrating when I look at the younger people today is they want this satisfaction and this gratification in two minutes.

David Segal (01:31:44):
Instant.

Peter May (01:31:45):
And if they're not feeling fulfilled, they got to look to do something else. Well, it doesn't work that way. You got to build. You got to sink your teeth into something that means something to you, and you got to put your whole self into it. And you've got to give it time because things don't get built overnight. I mean, maybe you have a brilliant technology idea and somebody else buys it really fast. That's great.

David Segal (01:32:18):
Those don't happen very fast.

Peter May (01:32:19):
But those don't happen very fast. And all these, the unicorns and all the things, and you guys are the beneficiaries of that, but you worked your asses off to get there.

Peter May (01:32:28):
We still do.

Peter May (01:32:28):
And you still do.

Peter May (01:32:28):
We still do.

Peter May (01:32:28):
Absolutely.

Peter May (01:32:29):
And actually, that thing your father said, which is do more than what's expected of you-

Peter May (01:32:34):
We come back to that.

Peter May (01:32:34):
I mean, it is timeless advice.

Peter May (01:32:35):
It's timeless advice.

David Segal (01:32:37):
And you can almost add onto it your point about instant gratification. Do more than what's expected of you and do it day after day, month after month, year after year and decade after decade.

Peter May (01:32:46):
Exactly. And understand that the gratification comes slowly. But if you enjoy the building part, if you enjoy seeing the progress and you feel like you're having an impact, then you don't even notice that the time's going by. You just do it and it happens around you.

(01:33:07):
And I think in terms of the not-for-profit work, in terms of philanthropy, it's the same thing. Pick an area that you really enjoy. I mean, I've kind of focused my philanthropy in three different ways. One is Jewish and I was Chair of Operation Exodus, which is one of the most rewarding things where we essentially, when you look back, transformed Israel. I mean, Israel's tech industry today is primarily the result of the million of people who came from the former Soviet Union who were all scientists and educated people who had great skill sets and brought that to Israel.

David Segal (01:33:46):
Wow ... to Israel. And how did you facilitate that? I mean, how was that done?

Peter May (01:33:48):
So early in 1989-1991, Gorbachev became the head of Russia, of the former of Soviet Union. And he allowed, when Perestroika came in, he allowed the Jews who were the Refuseniks, the people who wanted to be Jewish and didn't want to stay in the Soviet Union, he allowed them to leave.

David Segal (01:34:16):
Wow.

Peter May (01:34:17):
And so UJA Federation of New York and National UJA got created this thing called Operation Exodus, and I was Chairman of it. And we raised nationally $800 million; in New York, $ 250 million.

David Segal (01:34:31):
Wow. That's amazing.

Peter May (01:34:32):
It was the largest single fundraising campaign at the time. And we facilitated the relocation of a million people over a five, four year period.

Peter May (01:34:43):
Out of Russia.

Peter May (01:34:44):
Out of Russia, out of the former Soviet Union, to Israel. And if you look at Israel today ... And included providing the transportation, providing education, we had the housing for them temporarily, language training, job training. Guys who were doctors couldn't practice in Israel because they didn't have the same-

Peter May (01:35:15):
You helped them get certified.

Peter May (01:35:15):
They had to get re-certified. They had to become nurses first, whatever. The joke was, an entire cultural revolution in Israel, the joke was, when we used to run, I used to do missions to Israel, and you'd greet a plane from Moscow coming and landing at Ben Gurion Airport ... And the joke was, if they weren't carrying a violin, they were pianists. Because 25 orchestras got created in Israel as a result of this.

Peter May (01:35:40):
Wow. And not to mention startups, technology companies.

Peter May (01:35:44):
These were the entrepreneurs of Russia.

Peter May (01:35:48):
And they came in-

Peter May (01:35:48):
If you look at what's the stagnance of Russia since then, because they've had this huge brain drain.

Peter May (01:35:55):
Exodus of brain exodus. And to Israel's benefits, they've created this whole other economy.

Peter May (01:35:59):
Exactly.

Peter May (01:36:00):
That's incredible. I didn't know that story.

David Segal (01:36:01):
Which from that sprung the tech sector.

Peter May (01:36:04):
Exactly. That's where the tech sector came from.

David Segal (01:36:06):
That's such a dominant [inaudible 01:36:07].

Peter May (01:36:06):
But so my view on ... so it's Jewish stuff, then it was education, and I was on the Board of University of Chicago for many, many years. And then, healthcare.

Peter May (01:36:17):
Boy, they were lucky that the Ivy League schools didn't accept you once upon a time.

Peter May (01:36:21):
Well, probably. From the amount of money I give them [inaudible 01:36:26]

David Segal (01:36:26):
That's right. That's pretty good. We're going to let you go. But last thing, how do you think about legacy, whether it's Trian or it's your family or it's your philanthropy. What does legacy mean to you?

Peter May (01:36:38):
I don't think a lot about legacy. I think the most important part of my legacy is that I've given a sense of what I care about to my children and to my grandchildren. A sense of the same: do more than what's expected. The ethical imprimatur, the desire for making a difference. My kids are both very active in a lot of stuff, a lot of not-for-profit stuff. And my grandkids are going in that direction. I have a granddaughter who's now in medical school.

David Segal (01:37:14):
Amazing.

Peter May (01:37:16):
Which is exciting.

David Segal (01:37:16):
The highest calling.

Peter May (01:37:17):
And I have-

Peter May (01:37:18):
After private equity.

David Segal (01:37:20):
After private equity. That's right.

Peter May (01:37:20):
And I have another granddaughter who's about to go to law school to be a social justice lawyer.

David Segal (01:37:26):
Amazing.

Peter May (01:37:27):
And I have another grandson who's a teacher.

David Segal (01:37:29):
Amazing.

Peter May (01:37:31):
So they're not following me. I have one who's majoring in finance and he wants to do that.

David Segal (01:37:37):
He might-

Peter May (01:37:40):
But legacy to me is that people think that you've made a difference in the good things that are important in the world, not that you've made a lot of money.

Peter May (01:37:53):
It is a great honor to have spent what is now almost two hours together. It is a great honor to sit down with you, Peter.

David Segal (01:37:59):
Thank you so much. That was fantastic.

Peter May (01:38:00):
David and I stand on the shoulders of giants. And sometimes those giants don't even know we're standing on their shoulders. And you're one of those people.

Peter May (01:38:07):
I think you guys have done ... you've done a lot of really exciting things. And the fact that you care about this means you're learning a lot.

David Segal (01:38:13):
We love it.

Peter May (01:38:15):
We love it. It's a gift to us. And hopefully everyone that watches and we hope-

Peter May (01:38:18):
And I got some not-for-profit stuff that I can get you guys involved.

David Segal (01:38:20):
Please we'd love to.

Peter May (01:38:21):
Especially when it comes to matching entrepreneurial spirit and chutzpah with an amazing ... I mean, we're entrepreneurs by nature.

Peter May (01:38:29):
Right.

Peter May (01:38:29):
We've been building since we were kids. But I really, really appreciate you sitting down with us for this show.

Peter May (01:38:33):
Great.