(Adds Bienen's committee work in second paragraph, closing price of Bear Stearns (NYSE:BSC) shares in last paragraph.)
By Jed Horowitz
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Bear Stearns Cos (NYSE:BSC) . (BSC), whose shares have been battered amid rumors of difficulties in funding its businesses, is about to lose one of its 12 board members.
Northwestern University President Henry S. Bienen will not stand for re- election at Bear Stearns's (NYSE:BSC) annual meeting in April, a university spokesman said. Bienen declined to discuss his reasons, the spokesman said, and referred calls to the investment bank. Bienen currently serves on Bear's audit and its qualified legal compliance committees.
A Bear Stearns (NYSE:BSC) spokesman didn't have immediate comment.
The change comes amid major shifts at the company, which was founded in 1923. In the past nine months Bear Stearns (NYSE:BSC) suffered its first quarterly loss, forced Co-President Warren Spector to resign and saw longtime Chairman and Chief Executive James Cayne relinquish the CEO title amid headlines questioning his management abilities.
The events followed the collapse of two subprime mortgage-stuffed hedge funds last summer that, in turn, triggered a worldwide freeze in credit markets and continues to drag Bear Stearns's (NYSE:BSC) profitability.
Bienen, who is 68, last week said he will retire from Northwestern in August 2009, but age requirements aren't behind his departure from Bear Stearns (NYSE:BSC) . Six of the firm's directors are at least 65, including two over the age of 80, and the board has no mandatory retirement age. Cayne is 74 and executive committee chairman Alan Greenberg is over 80.
Bienen has been a director since Sept. 2004, when he replaced realtor William Mack of Mack-Cali Realty Corp. (NYSE:CLI) (CLI). The educator does not serve on any other corporate boards.
Bear Stearns (NYSE:BSC) , one of the biggest packagers of mortgage-backed securities on Wall Street, continues to suffer under the weight of those sinking securities and the residential and commercial mortgage loans that back them. Such assets are used to collateralize the short-term funding on which Bear and other investment banks depend for their daily trading and banking activities.
Market rumors persisted this week that brokers and banks may be refusing to trade swaps and some other instruments with Bear Stearns (NYSE:BSC) out of concern about the sinking value of the collateral. In an unusual move that echoed a special investors meeting defending its financial health last summer, Bear Stearns Monday evening dismissed the rumors after its shares fell 7.8%.
" Bear Stearns' (NYSE:BSC) balance sheet, liquidity and capital remain strong," Chief Executive Alan Schwartz said in a prepared statement, echoing remarks that former CEO Greenberg made during the day.
On Tuesday, while shares of its rivals soared after the Fed said it would extend $200 billion in 28-day loans to stimulate lending and trading, Bear's shares continued to lag. They zigzagged throughout the day, falling as much as 11% before crossing into positive territory in early afternoon as Bear's chief financial officer, Samuel Molinaro, went on CNBC to again deny rumors of a liquidity crisis.
Shares closed up 67 cents, or 1.1%, to $62.97. Shares of Morgan Stanley (NYSE:MS) (MS) were up 10%, Goldman Sachs Group (NYSE:GS) (GS) rose 4.8%, Lehman Brothers (LEH) gained 7.7% and Merrill Lynch (NYSE:MER) (MER) was up 6.4%. Bear's shares are off 28.7% this year and 58.6% in the past 52 weeks.
- By Jed Horowitz; Dow Jones Newswires; 201-938-4047; jed.horowitz@ dowjones.com
(END) Dow Jones Newswires 03-11-08 1708 Copyright (c) 2008 Dow Jones & Company, Inc.
