We’ve all been jealous down here, east of the Mianus and west of Long Meadow Creek. Greenwich has Walt,Monica and the Fabulous Five, Old Greenwich has Mark Madoff and his former wife, even Cos Cob probably has some bit- player in the financial scams, but what about Riverside? When would it ever be our turn?
It looks like it may finally have arrived. According to the Financial Times (I’d credit a specific reader for the tip but “Chicken Little” doesn’t sound legitimate), Riverside’s own, Jay Levine, of Dawn Harbor Lane, is at least peripherally involved with Royal Bank of Scotland’s failure (and Greenwich Capital, just to keep things local). And, get this, he’s a major contributor to Chris Dodd! Soooee!
A ROYAL BANK OF SCOTLAND executive who led its investments into “toxic” sub-prime loans was paid close to £40m in just three years, The Sunday Times can reveal.
Jay Levine, 47, was the bank’s highest-paid employee, earning almost four times more than former chief executive Sir Fred Goodwin.
Levine, who ran the group’s American investment bank RBS Greenwich Capital, received the bumper pay deals over 2005, 2006 and 2007, according to sources close to the bank.
His pay has never been disclosed since he was not a main-board director. The pay deals came as the bank ramped up its exposures to sub-prime mortgages, asset-backed securities and collateralised debt obligations (CDOs).
Levine, who lives in well-heeled Riverside, Connecticut, became co-head of Greenwich in 2000 after RBS acquired the business as part of its takeover of NatWest. In 2004 he was promoted to a larger role that also saw him head up corporate banking for the group across North America.
RBS has unveiled about £12 billion of write-downs since the credit crunch began and is poised to unveil full-year losses of up to £28 billion – the biggest loss in UK corporate history.
There are now six class-action lawsuits that have been filed against the group in the Southern District Court of New York, alleging that RBS misled investors on the true state of its accounts in a series of filings with the US Securities and Exchange Commission (SEC).
One of the lawsuits details how the bank’s exposures to CDOs ballooned from 2005 onwards. The filing, lodged under the name Gary Kosseff, quotes an SEC document in which RBS said that 76% of its £5.9 billion CDO portfolio had been acquired since 2006.
Levine announced he was retiring from RBS in December 2007, but has since been appointed chief executive of Capmark Financial, a lender specialising in commercial real estate.
Levine has donated thousands of dollars to the US Democrats over the past three years. Some of his biggest donations have gone to Chris Dodd, the head of the US Senate’s banking committee. He also supported former New York mayor Rudy Giuliani, a Republican, in his presidential campaign.
And Levine was on the board of a financial lobby group that sued the state of Connecticut over new laws that would force political donors to disclose donations made through spouses or children.
Are you asking yourself, can even a rich Democrat afford to live in “well-heeled Riverside” if Chris Dodd’s got his snout in the poor guy’s pants? Fret not. The town values Mr. Levine’s house at $9 million, which is okay, I suppose, but this Riverside non-waterfront looks a little low-brow for a man who made off with $40 million. Then again, there are those Dodd payments to consider.
For What It's Worth 
$40MM gross, multi-yr comp is what, $100MM/yr, in good yrs and bad….and hedgie income tends to be far more tax-efficient than silly W-2 pay of dim-witted IBers at some 4th-tier IB
Would that be the same Chris Dodd who wishes to cap the pay of Wall Street execs? Perhaps he wishes to return those donations.
Uhm, didn’t the article say 40 m pounds? As in approximately $80 million, the way the dollar exchanged with the pound these past few years?
Not really the point but I would notice the difference between $40 and $80 million dollars.
Additional pertinent info from RBS:
Press Releases
RBS announces Pay and Rewards Settlement for 2008
RBS Group can confirm that it has reached agreement with the UK Government as majority shareholder (through UK Financial Investments) on its approach to Pay and Reward for 2008/09.
The outline of the approach is as follows:
* No Reward for Failure: No bonuses or pay increases will be made to staff associated with the major losses suffered in 2008.
* Board Remuneration: As previously announced Board Executive Directors will receive no bonus for 2008 performance and no pay increase in 2009.
* Pay 2009: Agreement has been reached with Unite in the UK for staff which they represent below managerial grades. Ongoing discussions with staff representatives are taking place in other regions. This will mean a pay freeze for Directors and Executives in the Group worldwide, and for most staff in the US and the Global Banking & Markets division. On average, other staff will receive below inflation pay rises.
* Bonuses for 2008: No discretionary cash bonuses will be paid in 2009 for performance in 2008. Only legally binding guaranteed bonuses will be paid. Total cash bonus payments for 2009 will amount to £175m. Therefore total cash spend overall will have been reduced by more than 90%.
* Protection for lower paid staff: The existing Profit Share “bonus” scheme worth 10% of salary will not be paid for 2008, and will be terminated for all future years. An equivalent payment will be made as part of the existing monthly award package to staff below managerial grade, beginning in 2009. The average salary for this group is £18,979.
* Deferred awards: Staff who are essential to the bank’s recovery and who might otherwise be at serious risk of leaving, and who remain with the Bank will receive a deferred award for 2008. The deferred award will be released in three equal annual instalments beginning June 2010 and payable in sub-ordinated debt of RBS i.e. not in cash.
* Claw back of deferred awards: In individual cases up to 100% of these deferred awards will be subject to forfeiture at the discretion of the Remuneration Committee and if future losses arise in relation to their 2008 activities . Awards will therefore be based on sustained long-term performance, not on short-term revenue generation.
* Deferred Amount: The total amount of deferred awards will be finalised following our forthcoming company announcement relating to the Group’s Strategic Review. However, the total amount will represent a very significant reduction on the comparable prior year totals and the settlement overall will be as tough as that at any other comparable bank.
* Future Policy: RBS is undertaking a fundamental review of its approach to future remuneration to ensure that incentives are well aligned to the interests of shareholders over the long-term. The intention for 2009 is to follow the same approach and deferral periods as outlined for 2008 while ensuring the Group pays competitively overall with other international banks. More details will be provided in the Group’s forthcoming Annual Report and Accounts.
Commenting on this approach RBS Group Chairman Sir Philip Hampton said:
“A fundamental reform to pay and reward is needed to reflect the reality of the situation the company is in. The Board is satisfied that this approach will be seen by most reasonable observers to have balanced difficult conflicting issues. We fully recognise, as a Company, that we have to change materially not just the business we do but also the way we do business.
“Our over-arching aim is to restore the standalone health of the Group as soon as is practicable. In doing so, we need to retain the trust of our customers, shareholders and the wider public while delivering the best possible commercial performance. We need to retain, motivate and attract talented people to restore the fortunes of the Company. We will try to do that whilst being among those banks leading the industry in changing the way we operate.
“This approach also means that we now can offer some certainty to our employees to enable them to plan ahead financially. Our staff have had to contend with significant anxiety over recent weeks and months over a situation that the vast majority bore no responsibility for creating. We have tried, wherever possible, to focus the worst impact of the changes on our more senior staff and, in particular, those in the concentrated areas of our business responsible for the major losses recorded in 2008.”
Chris,
Jay is not a low roller, I think if you redo you homework you will find he has three houses down on Dawn Harbour. He does not like neighbors, so he just buys their houses ! I think you need to add up all the properties he owns.