It was a “mutual decision,” says CNBC’s Charlie Gasparino. And an understandable one, given that Bear Stearns collapsed on Alan’s watch. Hard to inspire the surviving troops at JP Morgan (JPM) when you’re carrying that baggage around.
Gasparino’s CNBC report, courtesy CNBC:
Former Bear Stearns CEO Alan Schwartz, who led the troubled Wall Street firm during its implosion and subsequent takeover by JP Morgan, has decided not to stay with Morgan, according to senior people inside the firm.
As reported on CNBC, Schwartz has been weighing whether to remain at Morgan as a senior investment banker following Morgan’s controversual purchase of the Bear for $10 a share, which led to widespread layoffs at the firm and many top Bear officials and employees losing massive portions of their wealth because so many were paid in Bear Stearns stock, which a little more than a year ago traded as high as $170 a share.
Initially, JP Morgan CEO Jamie Dimon said he wanted to Schwartz to stay at the firm. People inside JP Morgan say if he stayed he would have earned a salary as high as $10 million a year since he considered one of the best investment bankers on Wall Street.
But keeping Schwartz at JP Morgan would have been controversial; despite his chops as an investment banker, people inside Bear have questioned his leadership earlier in the year before the firm imploded with major clients yanking funds from the firm and refusing its trades. These people say Schwartz should have taken a more active role seeking additional capital from outside players or possibly a strategic buyer to bolster Bear’s balance sheet which included around $30 billion in illiquid bonds and other securities.
Inside JP Morgan, Schwartz wouuld have had to accilimate himself to a more staid corporate culture led by CEO Dimon, as opposed to the entreprenuerial culture that prevaded at Bear Stearns.
Schwartz has told people he has been working “everyday” on deals as an employee of JP Morgan and that he will stay at the firm through the summer. These people say he is considering a number of job options, including returning to a Wall Street firm, going to a boutique firm or working in private equity.
See Also: SEC Chairman Cox Rescues Bear CEO Alan Schwartz: Didn’t Lie About Bear on CNBC!
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