J.P. Morgan to Detail Post-Deal Plan
By KATHY SHWIFF
April 25, 2008 4:10 p.m.
J.P. Morgan Chase &
Co. continues to unveil details of the senior management structure for
the company after its planned acquisition of Bear Stearns Cos.
this summer, and on Monday is expected to outline the teams that will
run its mergers, capital markets and institutional sales teams.
"This week you'll see
several organization announcements from our management committee about
their direct reports, and we expect the rest by the end of the month,"
Steve Black and Bill Winters, co-heads of J.P. Morgan's
investment-banking business, told employees in a memo sent Monday.
"People selection is the most important and most difficult task in any
merger, and we want to make sure we spend the time to get it as right as
we can."
They promised to inform
all J.P. Morgan and Bear employees whether they would have a job no
later than the merger's expected close on June 1.
On Monday,
investment-banking sales head Tony Best plans to announce his team as
part of a reorganization that will include a global structure focusing
on cross-product marketing. Many of the top officials in his group will
be J.P. Morgan employees, said a person familiar with the plan. The M&A
and capital markets areas will have be more evenly divided, people said.
J.P. Morgan agreed to buy
Bear in mid-March at a bargain basement price after Bear suffered a
liquidity crisis that would have cast it into a bankruptcy. U.S.
regulators shepherded the deal, fearing Bear's demise would create
worldwide disruptions in the global financial system.
Several senior Bear
executives -- including fixed income coheads Jeff Mayer and Craig
Overlander -- have already orally accepted senior positions in the new
organization, according to regulatory filings. They will be vice
chairmen, while Alan "Ace" Greenberg, Bear Stearns' former chief
executive and current executive committee chairman, will continue to
work with his longtime clients and keep 40% of commissions and fees he
generates, according to a filing this week.
However, it is widely
expected that more than half of Bear Stearns's 14,000 employees will
lose their jobs, while cuts within J.P. Morgan will continue in troubled
areas such as leveraged finance and securitization.
"Our goal is to employ as
many people as possible," said Messrs Black and Winters's memo. Those
who don't make the cut will be directed to a newly formed "talent
network" that will strive to find them jobs with "direct competitors,
asset managers, private equity firms, hedge funds and our corporate
clients."
Among the luckiest Bear
Stearns' employees are those in its equities division, which also
includes the prime brokerage unit that finances hedge funds. J.P. Morgan
was weak in the area. Morgan's equities head Carlos Hernandez on
Wednesday disclosed that four Bear Stearns executives will join his
10-person management team. Bear veteran Michael Minikes, a former
treasurer of the company, will remain chief executive of Bear Stearns
Securities Corp., the firm's clearing unit, and Louis Lebedin will
continue as head of equity prime brokerage.
Bear's equities co-head
Steven Meyer will be deputy head of global cash equities and prime
services, reporting to J.P. Morgan's David Herzberg, who is global head
of equity derivatives. Mr. Meyer's partner at Bear Stearns, Bruce Lisman,
was named "chairman of global equities," where he will focus on
integrating the businesses of the two banks.
J.P. Morgan's head of
commodities, Blythe Masters, named Francis Dunleavy, formerly a senior
managing director in Bear' commodities business, as head of principal
investing for global commodities. Mr. Dunleavy is the only former Bear
employee among the eight staff Mr. Masters picked to run the operation.
Other announcements went
out during the week in areas such as emerging markets and finance.
Messrs. Black and Winters
apologized for the disarray and anxiety that the quickly negotiated
deal, arranged over a weekend of due diligence, has caused. "A lot about
this merger has been unusual," they wrote. "We thank everyone for their
patience and professionalism in what's been a difficult time."
--Jed Horowitz contributed to this report.
Write to Kathy
Shwiff at
kathy.shwiff@dowjones.com1
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