Bear Stearns to Pay Spector $23 Million

Spector, who led Bear Stearns' asset management division, resigned in August as the company's co-president and co-chief operating officer. He had spent his entire career at Bear Stearns since joining the firm as a trader in 1983 and had been considered a likely successor to Chairman and Chief Executive James Cayne.

The resignation followed the collapse of two hedge funds the division established to bet on risky mortgage debt.

These hedge funds' bankruptcies helped detonate the drainage of liquidity and sell-off of mortgage debt that have straitjacketed financial markets this year.

Many of the stock options and other grants Spector would have had to wait to exercise will instead become available to him on his last day. The value of the grants is around $23 million based on Bear Stearns' current stock price, the company said in a filing with the Securities and Exchange Commission.

Spector will also collect a retiree treatment of $207,761. Spector no longer serves as co-president, but remains a managing director until Dec. 28.

Under his severance agreement, Spector will not "disparage or encourage or induce others to disparage" Bear Stearns for at least a year after leaving.

Bear Stearns single-handedly triggered a decline of more than 2 percent in the entire stock market in a single day this summer when, attempting to soothe investors, executives in a conference call likened the mortgage shakeout to the bond market crisis of the late 1990s and the stock market crash of 1987.