Lessons from the Life of Jimmy Cayne, CEO of Bear Stearns

By Hadassa Kalatizadeh

James ‘Jimmy’ Cayne, longtime CEO of Bear Stearns, passed away on Tuesday Dec. 28th at the age of 87, days after a stroke. He left behind his wife, Patricia, two daughters and seven grandchildren.

He also left a legacy as leader of investment bank Bear Stearns during its peak, but also at its demise. His career highlighted the historic rise and fall of the financial giant, which is said to have set the tone for the financial crisis in 2008. As reported by CNBC, Cayne rose from humble beginnings as a newbie stock broker, and worked his way up to President and then Chief Executive Officer of Bear Stearns.

Cayne will also be remembered as a world-class bridge player and sponsor whose teams won several North American championships.

Cayne had served as President of Bear Stearns for over 20 years, and then as CEO, until he was compelled to step down and then forced to sell out his shares. His legacy offers a lesson for all of us—no one is infallible. He was once among the richest persons in the country. A few mistakes and a bear market later, and he forced out of the leadership position. He had to switch gears from one of the most respected deal makers to someone who got a lot of the blame for the entire financial crisis.

In the beginning of his career, Cayne was everything a broker should be—“PSD”- Poor by Wall Street standards, Smart and deeply Determined. He caught some of the company’s biggest clients. In 1993, he became CEO. Bears was uniquely known as one of Wall Street’s smallest firms, which regularly managed to have the highest earnings. Even till the end, the company managed to steer clear of the dot com craze. Cayne became a billionaire, one of the best paid CEOs in the industry—his paycheck reaching an astounding $40 million by 2007.

As per the NY Post, that’s about when things began to quickly deteriorate for the firm. Like many big banks, it started to gamble on risky mortgages known as subprime loans. Bear Stearns merged with JPMorgan Chase in March 2008. One of the worst economic downturns followed soon after. It was a domino effect on Wall Street- Lehman Brothers was the biggest name to fall in Sept. 2008, but multiple other firms also crumbled or needed to be bailed out. So, despite all Cayne’s accomplishments, in the end, it was a quick descent, and there are plenty of people who chose to remember only his mistakes in a lifetime of endeavors.

Above all, Jimmy Cayne will be remembered by all those who had the honor of knowing him as a wonderful and devoted husband, father and grandfather. His unique magnanimity and generosity of spirit marked his exceptional legacy as a business leader, colleague and friend.