Ex Bear Stearns co-president Spector gets no severance

By Joseph A. Giannone

NEW YORK (Reuters) - Bear Stearns Cos BSC.N on Wednesday disclosed that former co-President Warren Spector, who resigned under pressure in August, will walk away with more than $23 million in capital accumulation plan awards but will not receive a severance package.

The value of his unvested CAP units and stock options were worth $45 million in March, according to the company's annual proxy. But due to Bear's plunging stock price, all of Spector's unvested options were out of the money and therefore have no value.

Bear, which reached a 52-week high of $172.61 on January 18, closed at $91.28 on Wednesday.

The latest filing shows that like stockholders, who have watched their holdings lose 44 percent of their value since December 31, Spector's own wealth has been eroded by Bear's stumbles.

Under an agreement disclosed in a regulatory filing, the fifth-largest U.S. investment bank Bear said Spector was terminated without cause. He agreed not to disparage the bank or try to solicit its employees for one year.

Spector has other, vested options that fall outside the bounds of the agreement. Those options were worth $46.3 million at the end of last year, according to the March proxy.

Spector, who was once considered a front runner to succeed Chief Executive James Cayne, saw his career tumble in August as Bear Stearns bore the brunt of the U.S. mortgage market meltdown. It said last week said it expected to take a $1.2 billion write down and post a loss in the current quarter to reflect the value of its subprime holdings.

Spector, whose responsibilities included Bear's asset management unit, was a casualty of the credit crunch that slashed the value of mortgage securities, shut the market for collateralized debt obligations (CDOs) and caused two Bear-managed hedge funds to file for bankruptcy.

Under the agreement, Spector will draw salary payments based on an annual salary of $250,000, through the end of December and continue to have an executive secretary.

He also will receive payments of $207,761 from private equity "employee funds" managed by the bank. And if Bear pays an annual performance bonus to the firm's executive committee, Spector will receive a share.

According to the March proxy, Spector owned 519,879 Bear Stearns shares that are currently worth $47.5 million.

Bear Stearns declined to comment beyond the filing.

(Editing by Leslie Gevirtz)