Thursday, May 14, 2015

Marblehead Memory Hole

It is now $et in stone:

"CEO got $2m bonus from First Marblehead" by Todd Wallack, Globe Staff  |  October 6, 2010

First Marblehead Corp. said yesterday it gave its top executive a $2 million “special bonus’’ in its most recent fiscal year, a period in which the company reported just $16 million in revenues and a net loss of $145 million.

The Boston financial company reported in its annual filing on executive compensation that Daniel Meyers, chief executive, received total pay of $6.2 million, including $4.1 million in stock, for the fiscal year that ended June 30. The company has been struggling since its main business of packaging student loans for Wall Street imploded during the financial crisis.

Another bailout bubble waiting to burst.

For Meyers, though, last year’s compensation amounted to a pay cut — on paper.

Two years ago, Meyers was paid $16.2 million, but that was almost entirely made up of stock options, many of which were set above the market price and can’t be cashed in until the company shares recover. By contrast, last year’s compensation was made up of cash and stock that vested immediately.

Meyers, 47, is a cofounder of First Marblehead and former CEO who was brought back to reorganize the company during the financial crisis. Last year under Meyers, First Marblehead reduced its losses by more than half, from $363 million in fiscal year 2009.

Despite First Marblehead’s continued struggles, Meyers received the special bonus last year because the board of directors credited him with “significantly improving the viability of the company’’ by increasing its cash, cutting pay and benefits for other workers by $54 million, and making other changes to put it on firmer footing.

$ee how it works?

First Marblehead had 219 full-time employees at the end of June, down from more than 1,000 in 2007. Its revenues of $16 million are down from $880 million three years earlier.

“This is not an overnight turnaround, but we are beginning to deliver the results of that effort,’’ Meyers told investors in August. He also said the company is trying to boost revenue by launching new products related to the private student loan market.

Back to the $ame old $tuff!

“We are intently focused on aggressively building our revenue streams,’’ Meyers said in the statement on the company’s earnings.

First Marblehead’s stock has recovered somewhat from the darkest days of the financial crisis, when its shares fell below $1. It closed yesterday at $2.42 per share. In early 2007, before the crisis, the stock topped $50 a share.

Meyers originally served as chief executive and chairman from 1994, when the company was founded, until September 2005, when he resigned amid accusations that he gave improper gifts to company clients. He reprised the CEO role in September 2008 and became chairman in May 2010.

In its filing yesterday, the company also said it occasionally leases a private airplane from a company Meyers controls, Sextant Holdings LLC. Last year, it paid Meyers’s firm $796,174 to use the plane.

First Marblehead also said yesterday it paid its former chairman, Peter B. Tarr, $2.2 million, nearly triple his compensation a year earlier.

You got Tarred and $omeone feathered their ne$t!


I wonder where they are now.

UPDATE: Is a Marblehead man one of the world’s strongest?

It really is a banker's paper.