Bear Stearns Boss Steps Aside
by Stewart Douglas
Story link: Bear Stearns Boss Steps Aside
Under-fire investment bank Bear Stearns has today announced that long standing chief executive James Cayne has resigned from his post following the bank’s first quarterly loss amidst its sub-prime losses, after almost 15 years in the top job and almost 40 years of his career with Bear Stearns.
The respected veteran chief voluntarily resigned following the company’s poor performance over the last quarter, but will stay on as a non-executive chairman at the bank, which is currently ranked fifth largest in the US by size, and is widely considered to be a leading world investment institution.
Mr Cayne will be replaced by the bank’s current president Alan Schwartz, who will be charged with rebuilding the bank’s damaged reputation following its hedge fund collapses and further minimising the bank’s exposure to valueless sub-prime assets in the wake of the collapse of that sector several months ago.
Bear Stearns has experienced some degree of difficulty following its hedge fund collapses and laterally the sub-prime collapse which had the effect of necessitating writedowns, and has lost half of its market equity value over the last twelve months as a result of its loss of confidence in the firm and its abilities to control risk.
The former chief executive joined the firm back in 1969, and has risen through the ranks to earn the position of chief executive, having acceded to the top job in 1993. After nearly 15 years of loyal service at the top of his game, Mr Cayne is reported to have felt that following the recent results it would be unfair for him to retain his position.
He will nevertheless remain in an advisory capacity as a non-executive chairman, as a reflection of the respect and experience he has gained during his time with Bear Stearns and throughout his working life at the firm.
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