Bear Stearns CEO Gets $116M in Shares
WASHINGTON (AP) _ The Bear Stearns Cos. Chairman and Chief Executive James Cayne will get nearly 1.6 million company shares, worth about $116 million, through a long-term compensation program.
The investment bank and brokerage will also buy back $211 million worth of company shares from other executives who elected to take cash in the program.
Cayne and the other executives will receive the long-term compensation on Nov. 25, according to Sept. 19 filings with the Securities and Exchange Commission. The other company officials _ Executive Committee Chairman Alan C. Greenberg, General Counsel Mark E. Lehman, and Co-Presidents Alan D. Schwartz and Warren J. Spector _ entered into contracts to sell nearly 2.9 million shares back to the investment bank.
Shares of Bear Stearns finished at $73.74 Friday, Sept. 26, down 7 cents on the New York Stock Exchange.
Bear Stearns spokeswoman Elizabeth Ventura said the awards are compensation deferred from as far back as 1993. The size of the awards is a result of the fact that in 1998, the executives were given the option to defer payments another five years.
Ventura said that about three-quarters of Cayne’s award, for example, was a result of his decision not to take the compensation in 1998.
Ventura said that shareholders who bought stock over the same period received similar returns, except that the executives will have to pay income tax, rather than the normally smaller capital gains tax paid by investors.
The program was designed to align the interests of shareholders and executives, Ventura said. She said the 1998 decision to allow the executives to defer the pay further was made ``to keep management invested in the company.″
For the executives selling shares, the actual amount of the cash payments and the exact number of shares to be bought by the company will depend on the stock price from Sept. 2 through Nov. 24, the filing said.
Cayne disclosed in an SEC filing last Friday that his total stake in Bear Stearns, including the pending stock award of 1.6 million shares, amounted to 6.3 percent of the company’s common stock, or 6.4 million shares.