No Bonuses for MBIA Chief Execs

Updated: 4:22 p.m. EDT

NU Online News Service, March 21, 2:48 p.m. EDT

The senior chief executives of MBIA will not be getting a bonus this year, though the compensation committee agreed that they are entitled to one.

The Armonk, N.Y.-based bond insurer says that after discussions with the New York Department of Financial Services, it determined that “it was in the best interest of the company not to take cash bonuses or long-term-incentive awards for 2011.”

The decision affects Chief Executive Officer Jay Brown; Co-President, Chief Financial Officer and Chief Administrative Officer C. Edward Chaplin; Co-President and Chief Operating Officer William Fallon; and Ram Wertheim, executive vice president, chief legal officer and secretary of the company.

The company did not elaborate on the reasons for the decision and the NYDFS declined to comment.

MBIA is involved in litigation over the splitting of the company in two parts, separating troubled structured-finance instruments from its healthy book of municipal bonds. At the same time it is suing banks over residential-mortgage-backed securities that it claims it would have never insured had it known the mortgages were sub-prime.

The company was in serious financial shape at one point, and was stabilized once the companies were split. However, for the 2011 fourth quarter, MBIA reported a $626 million loss.

Had the bonuses been paid, Brown would have been entitled up to $2 million on top of his annual salary of $500,000.

In its filing, the company says that the purpose of its compensation program is to “attract, retain and motivate a highly skilled team of employees” and that without it there is “the risk that our compensation program will no longer be effective in meeting our objectives.”

Brown’s employment agreement with MBIA ends on Dec. 31, 2012.

In other news, Bloomberg reports that a jury will not hear the banks’ case against MBIA, which contends that then-Insurance Superintendent Eric Dinallo did not have the authority to split the insurance carrier in two.

The case will be heard by state Supreme Court Judge Barbara R. Kapnick.

The report also says another bank, UBS AG, has withdrawn from the suit, leaving three from the original 18 banks left in the litigation.

Correction: Clifford Corso, MBIA's chief investment officer and Anthony McKiernan, chief portfolio officer were not on the list of senior executives not receiving bonuses. 

Comments

Resource Center

View All »

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Extending Contact Center Capabilities Across the Insurance Enterprise

Today advancements in technology are making a big impact on business and society. To yield...

Drug and Alcohol Testing Requirements

In this two-part series, NBIS Risk Management team will break down the requirements to assist...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.