UPDATE 1-Bear fixed-income chiefs to leave after merger-memo

Wed May 21, 2008 6:00pm EDT

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By Joseph A. Giannone

NEW YORK May 21 (Reuters) - Two top Bear Stearns Cos Inc BSC.N executives -- fixed-income trading co-heads Craig Overlander and Jeffrey Mayer -- have told JPMorgan Chase & Co (JPM.N) they will not stay with the investment bank after JPMorgan's acquisition is completed next month, according to an internal company memo.

The memo, sent to Bear and JPMorgan executives Tuesday, did not reveal why they were leaving. A JPMorgan spokeswoman confirmed the memo's contents, but declined further comment. Neither executive could be reached for comment.

Last month, Overlander and Mayer were among just five Bear executives offered senior management jobs at JPMorgan's investment banking and trading division after the $1.5 billion deal is completed around June 1, according to JPMorgan.

Overlander was to serve as a vice chairman of the combined investment bank, focused on covering investor clients, while Mayer was slated to be a vice chairman focused on securities trading.

In recent weeks, the two have been active in helping integrate the investment banks, a process expected to result in more than 55 percent of Bear staff losing jobs, JPMorgan CEO Jamie Dimon said Tuesday.

Yet neither man would run a business or have anybody reporting to them, JPMorgan said. This week they informed JPMorgan they did not want to remain once the merger is completed, to pursue other interests, the memo said.

Mayer may be leaving millions on the table.

In an April filing, JPMorgan said it offered Mayer up to $27 million to join the bank after the merger, including $12 million in cash and restricted stock as a 2008 bonus, plus $15 million in restricted stock on the first day after the merger closes.

Mayer joined Bear Stearns in 1989 and ran the bank's mortgage department. He has been co-head of fixed income with Craig Overlander since 2002.

There is no reference to similar retention payments for Overlander in filings. He joined Bear Stearns in 1982 as a mortgage specialist, and in 1989 assumed responsibility for managing the firm's mortgage sales. (Reporting by Joseph A. Giannone, editing by Leslie Gevirtz/Jeffrey Benkoe)