I totally feel for the workers at Bear Stearns. Sure, my annual salary probably equals the lunch budget for the summer interns. And I bet their company cafeteria serves sushi every day—and real sushi, not some b.s. involving avocado and spam.
But to watch your retirement savings go up in smoke—and to realize simultaneously that your company too, and thus your career, is in flames—that’s a heck of a day.
As you all know by now, Bear’s stock tumbled from the mid-$80s in late February to $4.81 yesterday (the offer from JPMorgan prices it even lower, at $2). Like many employees of large companies, Bear’s 14,000 workers had much of their finances tied up in the stock, in the form of 401(k) plans and stock options. Here’s what that means: as ABCNews.com reports, the average Bear employee who had $200,000 in a retirement fund now has just $2,000.
Let me repeat that: your $200,000 nest egg—with which, say, you might have bought a cozy condo in Florida—is now worth $2,000. What will that get you? Maybe a plasma TV. Too bad you won’t be able to afford cable.
I feel for Bear workers because we here at TimeWarner underwent a similar shock not so long ago, when top management sold us down the river to AOL. Our stock went from trading as high as $90 to $14 and change today. My stock options? So far under water that when I received a recent statement offering me a strike price of $54, I laaaaghed.
A lingering effect of debacles like that one is this sense that the jokers in charge have little regard for the livelihoods and security of the thousands of workers in their charge. I mean:
As investment bank Bear Stearns collapsed, and was sold to JPMorgan Chase for a scant $240 million, its chairman James Cayne played bridge at a tournament last week in Detroit over two critical days, like Nero fiddling away as Rome burned.
Bridge. Bridge! Oh, sure, he’ll feel a pinch:
Cayne still owns a 5 percent stake in the company. Before last week he was estimated to be worth about $1 billion. Cayne, 74, stepped down as CEO in January after 15 years and much of the blame for the collapse has been placed on him. He owns 5.6 million shares, which last month were valued at $80 a piece or $449 million. The JPMorgan Chase sale values those shares at just $11.2 million.
Aww. Poor man. At 74, how will he live for a few more years on just $11.2 million? Here’s a suggestion: dole it out to your soon-to-be jobless workers as penance. Then go say 14,000 Hail Marys.