Jimmy Cayne, the 73-year-old CEO of Bear Stearns Cos., regularly insists he has no plans to step down. But speculation about Cayne’s departure has intensified since he forced Warren Spector, considered the heir apparent, to resign as co-president of the investment bank earlier this month.
Spector, 49, who joined Bear in 1983 and ran the firm’s fixed-income business, was held responsible for the failure of two Bear Stearns hedge funds that caused a shakeout in the credit markets. Alan Schwartz, co-president and head of investment banking, takes over as sole president.
Not everyone believed Spector should have been the fall guy.
“To fire Spector and leave Jimmy Cayne and [executive committee chair] Ace Greenberg in place would be to suggest that Spector was a rogue trader operating with no oversight,” says Richard Bove, an equity analyst at Punk, Ziegel & Co. “Bear Stearns management needs to be shaken up at the top, not in the middle.” A Bear spokesman did not return calls seeking comment.