This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bear Stearns Fat Cats Cashed Out at the Top

The facts?

Between the end of November 2006 and the end of March this year, former Bear Stearns boss -- and current executive committee chairman -- Greenberg sold 179,277 shares at an average price of about $161, raising a total of $28.8 million.

Today the value of those shares has collapsed by $7.7 million to just $21.1 million.

After deducting his stock option costs, Greenberg made $17.7 million in profits before tax. Had he waited till now to sell the shares, he would have made just $10 million.

Nice work if you can get it, as they say.

Greenberg was not alone. Between December last year and the end of March, the now-ousted co-president Warren Spector dumped 116,255 shares at an average price of $164, raising a total of $19.1 million.

The value of those shares today: just $13.7 million.

After option expenses, Spector made $16.4 million. That's $5.4 million more than he would have made if he had waited.

Last December chairman and CEO James Cayne cashed out 46,415 shares at around $165, raising $7.6 million

Value today? Two million dollars less.

And Samuel Molinaro, the chief financial officer who just got promoted to chief operating officer thanks to the company's financial crisis, saved himself more than $400,000 by selling shares last December for $1.5 million instead of waiting until now.

It is, perhaps, a shame that Bear Stearns' two disastrous hedge funds didn't prove as nimble and astute in their trading as the guys at the top. Instead, they were caught holding junk mortgage paper as default rates soared.

Stock sales weren't the only way top executives at Bear Stearns pocketed a fortune even as they sailed the Titanic straight at the iceberg. Company filings reveal that Bear Stearns also awarded a staggering $140 million in bonuses to top executives last year.

And by good fortune, just over half of those bonuses were paid in cash rather than in the company's fast-shrinking shares.
In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $122.77 0.00%
FB $94.20 0.03%
GOOG $627.26 0.00%
TSLA $253.39 0.15%
YHOO $37.84 0.00%

Markets

Chart of I:DJI
DOW 17,440.59 -127.94 -0.73%
S&P 500 2,067.64 -12.01 -0.58%
NASDAQ 5,039.7760 -48.8540 -0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs