The multi-line approach is probably my most realistic fallback, and I must confess that this has (for me) turned into a bit of an academic exercise, just for fun.

I did briefly consider a soundex encoding (metaphone actually), but I couldn't find a suitable encoding. Text::Soundex gives results like 'E460' and 'L222', and Text::Metaphone gives results that are in some cases worse than my Initials hack -

D:\tmp>cat metaphone.pl
use Text::Metaphone;

print $_,' => ', Metaphone($_),"\n" for map {chomp;$_} <DATA>;

__DATA__
Stephen Thrasher
Steve Trasher

D:\tmp>metaphone.pl
Stephen Thrasher => STFN0RXR
Steve Trasher => STFTRXR

D:\tmp>initials.pl
Stephen Thrasher => StTh
Steve Trasher => StTr

D:\tmp>
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