New York (TheStreet) -- The recent hiring of former New Jersey Governor and Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. Report chairman John Corzine by derivatives broker MF Global Holdings (MF) highlighted the star power of the corporate CEO.
MF Global shares hit new 52-week intra-day highs on Tuesday and Wednesday, trading as high as $9.25 late on Wednesday afternoon.
On the day of Corzine's hiring, MF Global shares soared.
On Thursday morning, MF Global announced that it was implementing the stock option portion of Corzine's hiring inducement, a purchase of 2.5 million shares of common stock at an exercise price of $9.25 per share, the MF Global Wednesday closing price. The option will vest in full on March 31, 2011.
Corzine's hiring wasn't the only star Wall Street resume recently tapped to turn around a struggling financial company.
, after emerging from bankruptcy, hired former
top dog John Thain.
CIT Group shares hit a 52-week high in the last week of March, at $39.80, hovered around the $39 mark on both Tuesday and Wednesday of this week.
The debate over the merits of the organic development of in-house executives versus the celebrity CEO search and hire, is rife with successes and failures on both sides of the argument.
The most recent big news internal promotion to the CEO ranks of a financial company -- when Brian Moynihan was named CEO of
Bank of America
-- only occurred after a very public search for a financial industry star to take the place of Ken Lewis. The CEO of
Bank of New York Mellon
, Robert Kelly, was much rumored as a candidate, though he steadfastly denied any interest in taking the top job at Bank of America.
Of course, the difference between Kelly, and Corzine and Thain, is that Kelly had a job while Bank of America was reportedly set on poaching him from Bank of New York. Corzine, after losing his Senate re-election bid, and Thain, after being the odd man out in the acquisition of Merrill Lynch by Bank of America, were technically on the rolls of the unemployment ranks before their recent hiring by MF Global and CIT Group.
Corzine and Thain are receiving nice pay packages. CIT Group is paying Thain $500,000 in cash salary, stock compensation of $5.5 million annually (subject to one- and three-year holding periods), and an incentive award of $1.5 million in 2010, not to mention a company-funded car and driver.
Corzine's contract includes an initial base salary of $1.5 million; a sign-on bonus of $1.5 million; a target cash bonus of $3 million for the fiscal year ending March 31, 2011 (based on individual and corporate performance goals and subject to a minimum bonus of $2 million); and a stock option to purchase 2.5 million shares of MF Global common stock.
Still, neither is seeing
the kind of compensation that tops the corporate sector, based on the latest CEO compensation data.
It is far too early to measure the success of CIT Group or MF Global based on the CEO hires, or even refer to the Thain or Corzine eras.
Maybe it's a sign of the overall hit that the wizards of Wall Street have taken in the wake of the financial meltdown that the former top dogs of Merrill Lynch and Goldman Sachs are now running companies that have either just emerged from bankruptcy or are at least, in the case of MF Global, struggling to return to sustained profitability and pay down a huge debt load.
Still, in light of all this, we decided to measure these CEO hires simply, by asking TheStreet.com readers,
Which financial firm made the best hire?
Based on the results of the poll, Thain's reputation may have taken the largest hit -- or, at least, taking over a company struggling back from bankruptcy like CIT was viewed by polltakers as the hardest assignment.
In the battle between Thain and Corzine, it was no contest. Approximately 16% of poll respondents indicated that CIT Group's hire of Thain was the wisest CEO decision, while 35% of survey takers said that Corzine was the shrewder CEO hire.
Though Corzine emerged the brighter star in the battle between the former Wall Street titans hired from the outside, the inside man was far and away judged the smartest CEO hire.
Approximately 49% of survey takers indicated that Bank of America's decision to keep it in the family -- even a dysfunctional financial family -- by hiring Brian Moynihan as its CEO was the CEO decision that, in the end, would be best for shareholders.
-- Reported by Eric Rosenbaum in New York.
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