One of Goldman Sachs’ former golden boys – who grabbed a quick $25 million for just three months of work in jumping ship to Merrill Lynch – faces a rockier future in his new job.
Peter Kraus, 56, took over this week as head of AllianceBernstein, which is suffering a stampede of clients withdrawing cash and a 39 percent drop in third-quarter earnings.
Kraus also has a second headache on his hands in his role as Chairman/CEO of AllianceBernstein: sitting on the management board of French insurance giant Axa, which owns 63 percent of the embattled Wall Street firm.
When he takes his Axa board seat early next year, Kraus will be under close review by fellow directors concerned about the unit’s poor performance.
AllianceBernstein’s assets are down by nearly half this year, to $452 billion from $800 billion, on withdrawals and investment losses. Its shares are down 77 percent.
Meanwhile, Axa shares are down 46 percent due to the global slowdown. It’s also exposed to as much as $135 million in losses from admitted Ponzi-swindler Bernie Madoff.
Kraus worked for 22 years at Goldman, leaving this year as co-head of global business to become chief of strategy at Merrill for a reported $95 million package.
It included a $25 million golden parachute, triggered by a change in ownership when Bank of America bought the brokerage in September, just a few days after Kraus started his job.