Bear Stearns Fixed-Income Chiefs Will Stay on With JPMorgan

JPMorgan Chase & Co. plans to keep the co-heads of fixed income at Bear Stearns Cos., the first senior posts given to executives from the failed New York securities firm since its rescue three weeks ago.

Bear Stearns's Jeff Mayer and Craig Overlander will be vice-chairmen of the investment bank, according to an internal memo distributed yesterday. Don McCree, head of fixed income at New York-based JPMorgan, is becoming executive vice president for treasury, corporate finance and corporate acquisitions.

JPMorgan Chief Executive Officer Jamie Dimon is trying to retain top talent at Bear Stearns by offering cash and stock bonuses to the best performers at the company, which got half its revenue from fixed-income units. Larger rival Citigroup Inc. said March 31 that it would reorganize its consumer division as the bank tries to recover from a record fourth-quarter loss.

``JPMorgan is in the driver's seat when it comes to picking who stays,'' said Jo Bennett, a partner at executive search firm Battalia Winston International Inc. in New York. ``The market out there isn't offering many other choices to these executives right now.''

Mayer, 49, will be vice chairman focusing on global markets, according to the memo from Steven Black and Bill Winters, co-chief executive officers of JPMorgan's investment bank. Overlander, 48, will focus on investor clients. Mayer and Overlander will both report to Black, 55, and Winters, 46.

Fixed Income

The fixed-income division, which used to be under McCree, is split in three in the reorganization. Matt Zames will be head of rates, currencies and municipal bonds, Venu Thirunamachandran will run hybrids and exotics, and Bill King and Mike Nierenberg will be in charge of securitized products. All four will also report to Black and Winters.

Zames adds the municipal-bond business to his previous responsibilities. Thirunamachandran shifts his focus from securitized products to hybrids. King stays put while getting a new co-head from Bear Stearns. Nierenberg, 45, used to be in charge of mortgage trading at Bear Stearns.

JPMorgan is buying Bear Stearns for a fraction of its market value after the securities firm faced bankruptcy following a run by clients and creditors last month. Bear Stearns used to be the largest underwriter of mortgage-backed securities, a market that collapsed last year due to rising defaults and falling house prices.

Carlos Hernandez, head of equities at JPMorgan, will also be in charge of prime brokerage and global clearing, according to yesterday's memo. Bear Stearns was among the top three providers of brokerage services to hedge funds, a business that JPMorgan was most interested in while considering the acquisition.

Headcount

Brian Marchiony, a New York-based spokesman for JPMorgan, confirmed the contents of the memo.

JPMorgan hasn't said publicly how many of Bear Stearns's more than 14,000 employees it will keep. JPMorgan had 180,667 employees with about 25,500 in the investment bank as of Dec. 31, according to a regulatory filing.

``We recognize this announcement does not include everyone in senior management,'' Black and Winters said in the memo.

Jeff Urwin, 52, co-head of investment banking at Bear Stearns, will run investment-banking coverage in the Americas, the memo said. He will report to Doug Braunstein, 47, whose responsibility was expanded to include equity and debt capital markets in the U.S. in addition to takeover advice. Braunstein also reports to Black and Winters.

Municipal Bonds

Bill Johnson, who used to be in charge of municipal bonds at JPMorgan, will now head proprietary trading, according to the memo. Bob Case will stay in charge of principal investments, such as taking private equity stakes using the firm's own money.

Others at JPMorgan with no change are: Blythe Masters, the head of global commodities; Daniel Pinto, head of emerging markets; Gaby Abdelnour, CEO of Asia Pacific businesses; Klaus Diederichs, head of investment banking in Europe; Nick O'Donohoe, global head of research; John Hogan, chief risk officer; and Brian Sankey, head of credit risk.