Government regulators stopped executives from taking bonuses from MBIA, a bond insurer, which might have killed the company. New York State’s “financial services department effectively rescued the company (in 2009) . . . from its crippling exposure to toxic mortgage-backed securities,” according to Peter Lattman in the Deal Book.
Jay Brown, chief executive of the Armonk, N.Y. company, had received bonuses totaling $6.3 million over the previous two years according to the report. He and three other executives had been planning on taking millions in bonuses. Sources told Lattman that state regulators felt their help had been “to protect the insurer’s policyholders, (and) was not meant to enrich company management.”
Company executives complained to New York that the large bonuses were needed to retain executives of their stature. They were also convinced not to award themselves long-term stock bonuses.