There is one job on Wall Street for which pay has continued to rise since the financial crisis: board member. Compensation for directors at the nation’s biggest banks has ticked up even as the banks themselves have reined in salaries and bonuses, DealBook’s Susanne Craig reports.
The directors of Goldman Sachs, who are the best compensated of any big bank board members in the United States, made $488,709 on average in 2011, up more than 50 percent from 2008, according to the compensation data firm Equilar. Goldman defends the board’s pay by saying the bulk of compensation is in stock that directors cannot touch until they leave the board, aligning their interests with those of shareholders. “More broadly, banks and compensation experts say, financial firms must now pay a premium to entice and keep qualified directors,†Ms. Craig writes.
But some on Wall Street argue that increased regulation has actually limited what a bank’s board can do. “About the only thing bank directors have more of these days is meetings,†joked one senior Wall Street executive who has frequent interaction with his board. “Regulators have all but stripped boards of the main powers they had before the crisis.â€
At Goldman, which is expected to release fresh pay data in the coming weeks, the board’s compensation is likely to rise for 2012 because the firm’s shares rose more than 35 percent last year, Ms. Craig notes. “After Goldman, Morgan Stanley’s director pay is the second highest on Wall Street, with an average of $351,080, roughly the same as it was in 2008 but much higher than the pay at bigger and more complicated rivals like JPMorgan Chase and Citigroup.â€
A TOP MANAGER AT SAC IS ARRESTED  | Michael S. Steinberg was a trusted lieutenant of Steven A. Cohen, having joined Mr. Cohen’s hedge fund, SAC Capital Advisors, when it was still a rising star on Wall Street. He led a charmed life, earning tens of millions of dollars and taking part in philanthropy. But he was arrested on Friday, becoming the most senior SAC employee to be ensnared in the government’s insider trading investigation, DealBook’s Peter Lattman writes.
He is among nine current or former SAC employees to have been linked to insider trading while at SAC. But Mr. Steinberg stands out. In an unusual move, SAC issued a statement in support of the portfolio manager: “Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity.â€
Mr. Steinberg, 40, pleaded not guilty on Friday and was freed on $3 million bail. “Michael Steinberg did absolutely nothing wrong,†his lawyer, Barry H. Berke, said in a statement. “Caught in the cross-fire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation.â€
WEIGHING ALTERNATIVES FOR DELL  | A proxy statement filed by Dell on Friday sheds light on the process of fielding interest from a range of possible bidders for the company. “Buried in one of the filing’s exhibits is a presentation that JPMorgan Chase bankers delivered to a special committee of Dell’s board on Jan. 18,†DealBook’s Michael J. de la Merced writes. Bids from the Blackstone Group and Carl C. Icahn would involve leaving a portion of Dell publicly traded, in contrast to the $24.4 billion takeover bid by Michael S. Dell and Silver Lake. But in that presentation, JPMorgan Chase bankers said alternatives to a full take-private could limit the company’s financial flexibility.
Advisers to Dell directors spoke to 71 potential bidders during the company’s 45-day “go shop†period, the filing shows. Among the parties to have circled the computer maker were Kohlberg Kravis Roberts and TPG Capital, Mr. de la Merced reports.
ON THE AGENDA Â |Â In Britain, the Financial Services Authority is split into separate regulators. The ISM manufacturing index for March is out at 10 a.m. David Tisch, co-founder of TechStars NYC, is on Bloomberg TV at 2 p.m.
WHY BAD DIRECTORS STAY IN PLACE  | “You really couldn’t have a stronger case for removing directors†than Hewlett-Packard, Michael Garland, executive director for corporate governance in the New York City comptroller’s office, told James B. Stewart, a columnist for The New York Times. And yet, all 11 of H.P.’s directors were re-elected on March 20. Mr. Stewart writes: “H.P. is hardly an isolated case. According to Patrick McGurn, special counsel for one of the major shareholder advisory services, Institutional Shareholder Services, shareholder efforts to remove directors in uncontested elections rarely succeed or come close, even in egregious circumstances.â€
PARSONS ENVISIONS A JAZZ REVIVAL  | Richard Parsons, a former chairman of Citigroup, who is working to reopen Minton’s Playhouse in Harlem, told The New York Times about his early memories of jazz. As a teenager growing up in Bedford-Stuyvesant, Brooklyn, he took his senior prom date to the Hickory House restaurant in Manhattan to hear the Billy Taylor Trio, an evening he remembers as his “first true adolescent experience.â€
A Temporary Leader for Chesapeake  | Chesapeake Energy named Steven C. Dixon, the chief operating officer, as acting chief executive, and the company set up an office of the chairman as it continued to look for a permanent leader to succeed Aubrey K. McClendon, Bloomberg News reports. BLOOMBERG NEWS
With New Freedom, EADS May Clash With Berlin  | Shareholders of European Aeronautic Defense & Space recently approved a new board of directors after a failed attempt last year to merge with BAE Systems of Britain. “The board’s new independence is likely to be put to the test quickly, as EADS prepares to disclose a new strategic plan that could put management on a fresh collision course with Berlin,†The New York Times reports. NEW YORK TIMES
As Takeover Targets, Vitamin Makers Look Attractive  | More takeovers of vitamin makers are expected, “as companies bet baby boomers and rising health care costs will drive demand for products that promise health in a bottle,†The Wall Street Journal reports. WALL STREET JOURNAL
Brazil’s Batista Plays Defense  | As his holdings have lost money, the Brazilian billionaire Eike Batista has been selling assets as part of an effort to restore confidence, The Wall Street Journal writes. WALL STREET JOURNAL
Glass Lewis Urges MetroPCS Investors to Reject T-Mobile Deal  | The firm joined its larger rival, Institutional Shareholder Services, in casting aspersions on the transaction, raising pressure on MetroPCS and T-Mobile to sweeten the terms of the merger or risk defeat. DealBook »
A Disgraced Analyst Muses About a Comeback  | Henry Blodget, editor of Business Insider, was barred from working in the securities industry after a settlement with the Securities and Exchange Commission. But he tells The New Yorker’s Ken Auletta: “Ten years ago, I got what amounted to a dishonorable discharge from the industry, and I’ve always been ashamed of that. At some point, if it seems appropriate, I would like to explore the possibility of being reinstated.†NEW YORKER
Stock Trading Moves Into the Shadows  | As stock trading moves from established exchanges to private platforms, “the shift is helping big traders hide what they are doing in the markets, and regulators are worried that the development could obscure the true prices of stocks and scare away ordinary investors,†The New York Times reports. NEW YORK TIMES
Demise of an Investment Fund Offers Cautionary Tale  | A closed-end fund sponsored by UBS, known as the Willow Fund, experienced big losses after piling into derivatives trades, raising questions “about how assiduously this fund’s independent directors watched over the manager as he ramped up his portfolio’s risk levels,†The New York Times columnist Gretchen Morgenson writes. NEW YORK TIMES
Cerberus’s Effort to Exit Gun Maker Moves Forward  | The private equity firm Cerberus Capital Management announced last year that it would shed its controlling stake in the Freedom Group, and it “is expected to kick off a more formal auction process this week to narrow the field of interested parties,†The Financial Times reports. FINANCIAL TIMES
K.K.R. Said to Be in Talks to Buy French Clothing Brands  |Â
REUTERS
Former Morgan Stanley Manager Starts Fund Focused on Japanese Stocks  | Tsukasa Shimoda, founder of Galleyla Investment, is “betting on interest from overseas investors after a recent surge in Tokyo stocks,†Reuters writes. REUTERS
Toys ‘R’ Us Withdraws I.P.O.  | Nearly three years after filing to go public, the retailer, which is backed by private equity, has decided to pull back from a market debut. DealBook »
How Consumers Let Down Their Guard Online  |Â
NEW YORK TIMES
Box, a Data Storage Company, Looks Overseas  | Box, the business data storage and management start-up run by Aaron W. Levie, “plans to expand its sales force and team of developers by opening offices in Germany and France in coming months, building on its first overseas foray last summer in Britain,†The New York Times reports. NEW YORK TIMES
Silicon Valley’s Storyteller  | Jerry Weissman has been helping companies go public for nearly a quarter century. He is not an engineer or a venture capitalist, though; he’s a former theater director, who schools top executives in how to talk to Wall Street. DealBook »
Judge Dismisses Bulk of Libor Suits Against Banks  | A judge threw out a “substantial portion†of claims in private lawsuits against 16 banks over manipulating a benchmark rate. REUTERS
U.S. Said to Examine Panasonic for Possible Bribery  | United States authorities are looking into whether a unit of Panasonic “paid bribes abroad to land business,†according to The Wall Street Journal. WALL STREET JOURNAL
Estimating the Effects of Cyprus’s Bailout  | “One relevant lesson might lie not elsewhere in the euro zone but in the carcass of a Los Angeles-based savings and loan institution, IndyMac Bancorp,†Landon Thomas Jr. writes in The New York Times. NEW YORK TIMES
New Tax Havens to Replace Cyprus  | The New York Times reports: “Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country’s oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing territories are circling.†NEW YORK TIMES
