Monday, August 06, 2007

Bridging the Gap in NYPost Reporting

by Ken Houghton

The WSJ notes a detail in the ouster of Warren Spector from The Old Firm:
Nevertheless, Mr. Spector had agreed months earlier to play with partners in a national bridge tournament in Nashville, Tenn. So he flew there in mid-July to compete. With Bear Stearns's shares reeling and concerns about the firm's management mounting, he spent about a week at the tournament, rising early to work the phones in his hotel room and jumping into the game in midafternoon. Along with his partners, Mr. Spector won the tournament. Still Mr. Cayne, who also played in the Nashville competition, was steamed that his lieutenant had been away from the office, according to people familiar with his thinking. [emphasis mine]

This does leaves open the question of whether Mr. Spector's sin was to play in the tournament or to win it.

The WSJ piece closes (currently) with a clear indication of Mr. Spector's faith in the firm:
Around that time, there was also tension over Mr. Spector's pay, due to his practice of deferring his annual compensation for a period of years, people familiar with the matter say. The firm allowed such deferrals, but Mr. Spector's total deferrals were becoming expensive for the firm, Mr. Cayne and some other executives felt.

They would also have been expensive for other firms. When Mr. Spector's name was floated as the possible CEO of Morgan Stanley last year (by, among others, the NYPost), we ballparked what it would cost to get him to walk away. From the public documents, it would have been about $40 million—before you start talking compensation for any new job.

That's a fairly clear alignment of Mr. Spector's interests with The Old Firm's. Apparently, it's just not enough for Messrs. Cayne and Schwartz, who, per the WSJ article, will move Jeffrey Mayer into Mr. Spector's old position.

UPDATE: Via the comments at CR, the school where Spector finished his undergrad days discusses his ouster. This may be key:
Warren’s rise was often described as “meteoric” in the press. The MarketWatch story linked above calls him “high-flying” and “top trader.” And the WSJ story notes he is often named as a likely heir to the CEO chair.

Meanwhile, the firm’s other President and co-Chief Operating Officer is Alan Schwartz. Who is ten years older.

One is led then to wonder if the opportunity provided by the industry-wide crisis is not being used to arrange an eviction by people less than pleased with Warren’s press clippings.

Mr. Spector uses the same publicist as his wife.

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