Despite seeing more than $9 billion in market capitalization evaporate in less than two years, Ambac Financial Group Inc. paid out combined bonuses of nearly $3 million to four executive officers, it revealed in a filing with the Securities and Exchange Commission Monday night.

In 2008 Ambac paid cash bonuses of $975,000 to chairman Michael Callen, $500,000 to chief executive officer David Wallis, $950,000 to chief financial officer Sean Leonard, and $550,000 to Douglas Renfield-Miller, executive vice president of Ambac and CEO of Everspan Financial Guarantee Corp.

Ambac said in the filing that the bonuses reflect the company's performance, the individual executives' performances, and the "overall economic environment." Overall executive compensation fell 60% from 2007, Ambac said in the filing; however, it also now has fewer executive officers.

Unlike past years, Ambac did not award the executives any equity or stock options. An Ambac spokeswoman declined to comment beyond the filing.

"The ultimate goal of the compensation framework was to create an incentive for key executive officers that have been, and will continue to be, instrumental to the implementation of the firm's corporate strategy," Ambac said in the SEC filing.

In addition, Ambac also announced the base salaries it will pay its executive officers in 2009. Wallis will continue to receive the $1 million salary he earned in 2008, after taking over from Callen as CEO and president of the company in October. Callen had served as an interim CEO and president after Robert Genader resigned earlier in the year.

Renfield-Miller received a raise to $600,000 from $300,000, and Leonard received a raise to $550,000 from $380,000.

Heading into 2008, the company did not grant any of the named executive officers raises, according to an SEC filing. Ambac seeks to give executives a "relatively small portion" of overall compensation through base salary, according to proxy statements.

"Base salaries provide our executives with a minimum level of fixed compensation and are generally below the median base salaries paid to executives in corresponding positions by competitors in the peer group discussed below," Ambac said, referencing a group that included other bond insurers.

The filing comes less than a month before Ambac plans to report year-end results for a difficult year. Ambac has recorded a net loss of $2.4 billion through three quarters of 2008 after recording a net loss of $3.2 billion in 2007.

Shares of the company have fallen nearly 99% since hitting a high of $96.10 in May 2007. The stock closed trading at $1.04 per share yesterday.

The company in December announced it was ending its dividend payment, preserving approximately $11.5 million in cash annually. Ambac executives during the company's third-quarter conference call warned the dividend would likely be suspended because corporate governance laws prevented it from paying one out with a negative stockholders' equity.

Ambac has asked the U.S. government for an infusion of $1.5 billion through preferred equity to capitalize muni-only subsidiary Everspan, the former Connie Lee Insurance Co.

Ambac, which has already put $150 million into Everspan, delayed plans to inject its own capital into the subsidiary when Standard & Poor's put bond insurer Ambac Assurance Corp. on review for downgrade in September.

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