MF Global Holdings Ltd. awarded former Chief Executive Officer Jon Corzine about $8.5 million in compensation last year, including almost $5.4 million of stock options in the bankrupt brokerage firm.
Corzine’s pay of about $3.1 million included a bonus of $1.3 million, according to a filing by MF Global in U.S. Bankruptcy Court in Manhattan. Stock options in bankrupt companies are almost always worthless.
Corzine, a former co-chief executive officer of Goldman Sachs Group Inc., worked at MF Global for 20 months before quitting amid regulatory probes after the firm filed the eighth-largest bankruptcy in U.S. history and brokerage customers’ accounts were frozen. The parent company still is trying to trace $1 billion that vanished into its brokerage, lawyer Brett Miller told a judge on May 18.
The brokerage, MF Global Inc., is liquidating separately to try to repay customers who are estimated to be out $1.6 billion. Corzine has said he doesn’t know where the missing money is.
Corzine, a former governor of New Jersey who helped run Goldman Sachs from 1994 to 1999, sought to transform MF Global into a mid-size investment bank after arriving there in March 2010. He increased the firm’s risk and used its own money to trade, including investments in European sovereign debt.
Corzine was in line for $12.1 million in severance and prorated bonus and benefits payments if he left for “good reason” or was fired “without cause,” according to an MF Global proxy statement filed last year. Of that, $9 million was to have been severance payments, according to the filing, which said the company’s compensation committee found that Corzine’s performance had been “exemplary” since joining the firm.
Corzine said after resigning that he wouldn’t take severance pay.
The executive took home $4.3 million in salary and cash bonuses for the two fiscal years that ended March 2011, according to the firm’s proxy statement. In fiscal 2011, Corzine agreed to lower his guaranteed annual cash pay to $750,000 a year from $2 million. He received options to buy 2.5 million MF Global shares when he joined the firm, according to the proxy.
With Corzine unable to find a buyer, MF Global filed for protection from creditors on Oct. 31, saying it had $41 billion in assets.
The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).