James Cayne has stepped down as CEO of investment bank Bear Stearns, and has been replaced by Alan Schwartz, the company’s president. Cayne will remain chairman of Bear’s board of directors.
Cayne had been CEO of the company since 1993, and has served in the dual role of chairman and CEO since 2001. Schwartz has been at the company for more than 30 years.
“I am gratified that the board has continued confidence in me, but I believe this is the right time to implement our succession plan,” Cayne said in a statement. “We are beginning a new year and are at a pivotal point in the development of our business at a time of rapid change on Wall Street.”
Cayne’s decision follows a tough period for Bear Stearns. The bank was hit hard by the US sub-prime mortgage fallout in 2007. The company had to make write-downs of $1.9 billion in its mortgage inventory, resulting in a pre-tax loss of $1.4 billion in the fourth quarter of 2007.
Despite this, the new CEO is sanguine about the company’s future. “We have a strong capital position, a unique culture and great talent throughout the organisation,” Schwartz said in a statement. “Although the operating environment has been difficult, we are off to a good start in 2008. We remain excited about our core equity, banking and fixed income businesses, our international expansion initiatives, and the further development of our energy and wealth management platforms.”