What to Do With Bear Stearns' CEO?

JPMorgan Chase is obviously acquiring a lot in its $236 million purchase of Bear Stearns. For pennies on the dollar, the banking giant is buying extensive prime brokerage and clearing operations, as well as a $1.2 billion office building.

But there’s some truth to the old aphorism that a financial firm’s assets go out the door every night. Citing people involved in the deal talks, The New York Times said Monday that up to a third of that work force may not come back, involuntarily.

Still, JPMorgan is trying to retain some of that human capital all the same. Up in the air, however, is whether the bank will retain one of Bear Stearns’ most valuable assets of all: its chief executive, Alan D. Schwartz.

It’s notable that in announcing the deal Sunday evening, JPMorgan made no mention of what would happen to Mr. Schwartz or other senior executives if the deal goes through. Bear Stearns has been similarly mum.

JPMorgan has floated a couple of ideas about how to retain Mr. Schwartz, according to people involved in the talks. One idea is to make him a vice chairman and, unofficially, a deal maker at large who can parachute into different situations. Such a position would similar to the post held by James B. Lee Jr., the JPMorgan banker known as Wall Street’s money man.

A highly regarded and successful investment banker, Mr. Schwartz used his polish and his corporate connections to carve out a niche for Bear Stearns in mergers and acquisitions advisory. As a specialist in media deals, Mr. Schwartz advised some of the industry’s biggest names, including former Walt Disney chief executive Michael D. Eisner and Cablevision’s founding Dolan family.

Last month, Microsoft hired Mr. Schwartz to serve as a consigliere to its chief executive, Steven Ballmer, as the software giant tries to tackle Yahoo.

Mr. Schwartz has been paid handsomely for his services. From 1993 through 2007, he was paid more than $160 million, according to Equilar, an executive compensation research firm.

Should he decide to leave, Mr. Schwartz is unlikely to receive the kind of big payout that is known as a “golden parachute.” According to Reuters, Bear Stearns has both a “capital accumulation plan” and a stock award plan. Yet both feature a so-called double-trigger provision that ensures that awards and benefits are not accelerated without being fired without cause or resignation for a good reason.