With Congress recognizing the public’s dismay over this massive taxpayer giveaway, we are starting to see some serious questions about the folks who drove the financial ship of state aground.

Hence, its time to take a closer look at pay and severance packages for CEOs at investment houses, banks and mortgage lenders, who perversely stand to benefit from the public’s largesse.

Here’s a quick overview:

Lehman Brothers Chairman and CEO Richard Fuld Jr. made $34 million in 2007. Lehman (OTC:LEHMQ) filed for Chapter 11 Bankruptcy protection earlier this month. Fuld also sold nearly a half-billion –$490 million – from selling LEH stock;

Goldman Sachs (NYSE:GS)paid its Chairman and CEO Lloyd Blankfein $70 million last year. Co-Chief Operating Officers Gary Cohn and Jon Winkereid were paid $72.5 million and $71 million, respectively.

Bears Sterns (BSC JPM)former chairman Jimmy Cayne, rescued by a $29 billion Fed shotgun wedding to JPM, received $60 million when he was replaced;

American International Group (AIG) chief executive Martin Sullivan got a $14 million compensation package in 2007. He was ousted in June. The insurance giant (NYSE:AIG) is on the receiving end of an $85 billion federal bailout. Robert Willumstad was handed $7 million for his three months at the helm. (Edward Liddy took over as AIG’s chief executive earlier this month).

Morgan Stanley (MS) Chairman John Mack earned $1.6 million + stock. Chief Financial Officer Colin Kelleher got a $21 million paycheck in 2007. Morgan Stanley also received an expedited approval to become a banking holding company in 48 hours — that’s record time.

Countrywide Financial’s (CWF BAC) founder & CEO Angelo Mozilo,  which has been at the forefront of the subprime fiasco, cashed in $122 million in stock options in 2007; His total take is estimated at over $400 million dollars;

• Stanley Neal, who steered Merrill Lynch (NYSE:MER) into financial collapse before being taken over by Bank of America, was given a package of $160 million when he left his post last year; That package makes current CEO John Thain was paid $17 million in salary, bonuses and stock options in 2007 look like a bargain.

Bank of America (NYSE:BAC) is acquiring Merrill. BofA CEO Kenneth Davis brought home $25 million in 2007.

JP Morgan Chase & Co. (JPM) Chairman and CEO James Dimon earned $28 million in 2007. Chase  acquired troubled investment house Bear Stearns earlier this year with the federal reserve backstopping $29 billion in Bear assets to help get the deal done.

Fannie Mae (FNM) CEO Daniel Mudd received $11.6 million in 2007. His counterpart at Freddie Mac (FRE) Richard Syron, brought in $18 million. Federal government is taking over the mortgage backers with Herbert Allison to serve as Fannie CEO and David Moffett the new CEO at Freddie.

Wachovia Corp. (WB) Chairman and CEO G. Kennedy Thompson received $21 million in 2007. He was succeeded by Robert Steel as CEO in July. Steel is slated to get a $1 million salary with an opportunity for a $12 million bonus, according to CEO Watch. Wachovia (NYSE:WB) is one of the banks that could be sold in the midst of the financial crisis.

• Seattle-based Washington Mutual (WM) will pay its new CEO Alan Fishman a salary and incentive package worth more than $20 million through 2009 for taking the helm of the battered bank, according to the Puget Sound Business Journal.

>

0924webpay_3

Did I miss anyone? (Many of these do not include stock option packages)

Its time to start talking about a clawback provision as the grounds of any bailout.  As I have argued in the past, I have no problem with people making millions or billions IF THEY EARN IT.

But these guys above? If every man woman and child in the USA is going to be on the hook for a Wall Street Incompetence Tax of $5-10k each, then the folks who brought us this mess, and took bonuses under the false pretense that the profits they generated were real, should also shoulder some of the costs . . .

>

UPDATE: September 24, 2008 9:22am

I just noticed the NYT had a front page article on the same subject, only without any dollar figures as to the salaries and bonuses.

Consider the above a NYT sidebar.

>

Previously:
What’s Wrong With Billionaire Fund Managers?  (April 2008)
http://bigpicture.typepad.com/comments/2008/04/whats-wrong-wit.html

Sources:

CEO pay: What those involved in the financial meltdown made

Mike Sunnucks and Chris Casacchia
The Puget Sound Business Journal contributed to this story
Phoenix Business Journal, Tuesday, September 23, 2008 – 11:58 AM MST
http://www.bizjournals.com/eastbay/stories/2008/09/22/daily37.html

Bailout should cut the cords of golden parachutes
The Patriot Ledger Sep 23, 2008 @ 06:30 AM
http://www.patriotledger.com/business/x804155672/OUR-OPINION-Bailout-should-cut-the-chords-of-golden-parachutes

In Bailout Furor, Wall Street Pay Becomes a Target
STEVE LOHR
NYT, September 23, 2008
http://www.nytimes.com/2008/09/24/business/24pay.html

Category: Bailouts, Corporate Management, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

65 Responses to “CEO Clawback Provisions in the Bailout?”

  1. Don says:

    Agree completely, although the list is incomplete — Johnson and Raines are front and center on the “omitted” list. Also, how about the lobbyists these companies paid?

  2. JL says:

    Since Bear Sterns was the first to be bailed out, why are they not on the investigation list?

  3. Ha says:

    I pulled down 160k in severance. But that was 10 years ago this week.

    Kind of like the way Willie Mays was compensated versus what’s happening today.

    The difference of course is the bigger you FU the more you get.

  4. Doug_S says:

    Who cares. Envy. Economically insignificant.

  5. cfpete says:

    Do you honestly believe that all of those listed above share equal responsibility for our current problems?

    On that note, do you have some special relationship with Citigroup?

    You list Jamie Dimon and Ken Lewis but not Chuck Prince.

    Jamie Dimon and Ken Lewis are alomost angels compared to Chuck Prince and the other former CEOs listed.

  6. freddy says:

    http://www.rollcall.com/news/28599-1.html?type=printer_friendly

    According to this blog, per Tony Fratto, the bailout plan has been in the works for weeks as ‘a contingency plan’. There’s probably a scam in there somewhere.

  7. bruce says:

    nobody is worth that much,it is obscene

  8. LooksLikeItIsTooLateToWakeUpAmerica says:

    Barry Ritzhold,

    you are not being helpful by singling out the aspect of the Paulson plan that “they” will be willing to change in order for the public to swallow the rest.

    Executive compensation, no matter how disgusting it is, is not the main point of the plan, and not the priority in fighting it.

    The priorities are: TRANSFER OF WEALTH from taxpayer to financial elite and HYPERINFLATION as a way out that punishes savers and rewards debtors, the ones that created this.

    Please, do not fall for their distraction tactics…if the Plan is approved with some limits to executive compensation it will not be any better in any significant way.

    A concession on executive compensation is intended for the public to swallow the really significant parts of the plan: buying securites at inflated prices, no effective limits on kinds or amount of money to be spent, no effective supervision, and no legal liability in the future.

    These are the aspects that, in my opinion, have to be atacked.

  9. VennData says:

    The subprime guarantees at Fannie and Freddie only got significant after 2005, long after Raines left according to the Golfarb analysis just released yesterday

    “…Fannie Mae and Freddie Mac purchased and guaranteed “many more low-documentation, low-verification and non-standard” mortgages in 2006 and 2007 “than they had in the past.” He said the companies increased their exposure to risks in 2006 and 2007 despite the regulator’s warnings…”

    So in spite of people like Dennis Gartman et al who blame Raines, he was long gone.

    Raines may be responsible if they start claw backs on accounting issues though.

  10. pmorrisonfl says:

    At a skim, all the CEO compensation listed doesn’t reach 1 billion dollars. If we put the Investment Bank Foreclosure Prevention fund, 700B, on one side of the scale, and the CEO compensation on the other side… well, I don’t see why this is even on the radar, except as a sop to appease angry taxpayers.

    Now if we were going to put these people on the hook for the 700B, that would be a different story.

  11. wally says:

    I’d make this FAR more general… it is time to bring back the steeply gradualted income tax that worked so well in this country for decades before the rich decided they were royalty.

    Also, since the US is bigger than Berkshire-Hathaway, I’d expect the same deal, or better, for ‘rescue’ money that WEB got from Goldman.

  12. Bruce in Tennessee says:

    Well, I thought this was interesting from, of all sources, CNBC…

    The Pollyannas here aren’t expecting another 40% decline..

    http://www.cnbc.com/id/15840232?video=865956419&play=1

    S&P to Fall Another 40%…

    Barry, he’s a charter…like you.

  13. “ship of state”

    …we ere onna HMS PALOOKAVILLE..steamin outta sea to rescue survivors fromma SHIPWRECK.

    the United Flakes Ship TITANIC out of Wall St. has hit a iceberg an come to a shudderin stop!

    the TITANIC is holed below the water line and toxic sewage has polluted the atlantic.

    Admiral PAULSON has vowed to save the vessel at ALL COSTS and sez that the TITANIC is unsinkable and therefore will never go down!

    Catain wobbleya BRUSH was onna bridge atta time o da CRASH declarin VICTORY after the shock an awe.

    wobbleya : it wan me wot dunnit! it were a shot sellers innit!

    paulie : i gotta 7000,000,000 dolla vacuum gun annit gon suck…

  14. Francois says:

    “Who cares. Envy. Economically insignificant.”

    There’s a shitload of people who care; just ask Senators and Congresspeople right now. They’re getting an earful and then some.

    Maybe you’re so fully vested that you probably don’t have to care.

    Economically insignificant? Can you spell “incentives”?

    Head I win, tail you lose is a game that can’t last…it’s cheating! This is insignificant?

  15. Jeff says:

    Have a feeling that if the CEOs were taking performance enhancing drugs, this process would speed up. Find it ironic that Congress wasted their time on an issue such as steriods in baseball while our Financial infrastructure was in the midst if collapse…

  16. Adam Butler says:

    Barry, I am outraged to the point of distraction.

    It seems to me the responsibility for much of the current mess in credit markets, as well as the egregious compensation awarded to these weapons of mass incompetence, falls squarely in the laps of the respective Boards of Directors. Is it possible that ALL of the Audit Committees and Compensation Committees were asleep at the wheel?

    I am NOT against gargantuan compensation IF a person generates gargantuan value for stakeholders; what you describe is the antithesis of free market capitalism. It is indeed Socialism for the Rich.

    Let the law-suits begin.

  17. SL says:

    Indymac?

    Also, how do we classify what could turn out to be a fox slipping the fox trap, namely, the AIG warrants for 79.9% deal issued but yet-to-be shareholder approved?

    If the mega bailout goes through, AIG will pass off their losses to the USA and be back to business as usual with a Merry Chri$tmas for all MDs and above.

  18. Mr. Sparkle says:

    Barry – isn’t BAC CEO Kenneth Lewis not Kenneth Davis?

  19. charlottemom says:

    CEO of BofA is Ken Lewis.

  20. dgoverde says:

    Barry,

    Instead of encouraging us to focus on their diversions, why don’t you start organizing people into a group that will march on Washington to protest the criminal nature of this bailout? As the author of Bailout Nation, it would certainly be good publicity for you. As the most popular financial blogger alive, you probably have the clout to get such a grass-roots movement underway, and as one of the few citizens who understand that Paulson is in fact trying to steal from us, don’t you feel like maybe you owe it to your country to try to intervene? You’re standing on the soapbox. Use it. Please, I beg you.

    dgov

  21. Doug_S says:

    Lets compensate quarterbacks solely on the winning record of the team. A team with a weak line, poor defense and other problems will get nothing other than a third rate quarterback.

    Lets compensate heart surgeons solely on ten year survival rates. You’re a diabetic? Go find some fifth rate doctor, you ain’t going to ruin my paycheck.

    How about you let the owners of the business determine how much to pay the CEO? I want United Auto Worker contracts approved by the shareholders of GM, Ford and Crysler.

  22. oulous says:

    I see tons of small business people put all they have into their business and fail.

    I see middle class people declare BK because they tried to live a certain way and failed.

    New things rise up in their place and some get through with success.

    This is innovation. Let these damn things fail! Its the biggest scam ever that it will bring down america. Bush, paulson, bernanke et al have already brought down america.

    If we let wall street get cleaned out new firms will rise to take their place and innovation will improve our society. The same goes with any industry.

    There are tons of independent car makers that would make better cars for americans than the big 3 do.

    This stuff just needs to die.

  23. pulaski says:

    > I have no problem with people making millions or
    > billions IF THEY EARN IT.

    Then you either don’t care or don’t understand the effects that massive inequality produces. There are many more zero-sum games than economists will admit: land, water, political representatives to name a few.

  24. bsneath says:

    “Who cares. Envy. Economically insignificant.”

    Add up the corporate compensation packages across America and it becomes very significant. Further, excessive executive compensation packages generate greater distrust and anti-corporate attitudes among the general population and members of Congress. Call it envy if you want, but do not overlook the serious “big picture” ramifications.

  25. peggy says:

    Why are we not demanding that are congressmen and women no longer be allowed to accept any contributions from the financial industry as part of this package.

  26. Jay says:

    Misguided ideology and the Gospel of Home Ownership …

    From A Speech by George W. Bush October 15 2002, George Washington University, Washington DC.

    President Hosts Conference on Minority Homeownership

    “…More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a — it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future. We’ve got to work to knock down the barriers that have created a homeownership gap.
    I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. (Applause.)…

    …To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can’t make a down payment. They may be qualified. They may desire to buy a home, but they don’t have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can’t cross. And one way to address that is to have the federal government participate. ….”

    http://www.whitehouse.gov/news/releases/2002/10/20021015-7.html#

  27. Angry-Worker-Saver says:

    I agree with the poster who points out that the CEO compensation thing will be a sop to the masses, and we need to focus on the deeper issues.

    With that said, I also think that in terms of clawbacks for de-facto defrauding of investors, the net needs to be cast much more widely. Not just the boards and CEOs of this small number of institutions, but essentially all of the senior and middle management, of a much larger range of institutions, are culpable here. And stock option compensation from 2005 onwards should also be on the table. For example, at least half of the $2.5 billion of oddly-timed bonuses handed out at Lehman ought to come back as part of the bailout package — or as punitive taxes. Add this sort of thing up over multiple firms, and it’s clear that we’re talking about a significant fraction – 10% or more – of the $700B bailout.

    Rather than go through everyone’s accounting, Congress could simply pass a law boosting the tax rates on “earnings” above $1 million and include provisions to nail stock option compensation to boot. (Those arguing that this would punish some of the innocent should inquire how innocent the other overly-paid CEOs are, considering their companies aren’t exactly printing money these days either — and considering that the Boards of Directors around the company are a large mutually-back-scratching club. In other words, they’re all guilty of perpetuating a system that everyone knows is senseless. If everyone making fortunes on the backs of America’s workers is held accountable here, it will be a powerful precedent to encourage them to police each other and prevent it from happening again.)

  28. BobC says:

    I believe that not enough attention as been paid to culpability and that the claw back idea is just a shot across the bow. Executive compensation has become a no risk venture for the top levels of management. The financial debacle is the direct result of things conceived of and executed by top level management throughout the industry. To give those responsible for the losses a soft landing while cleaning up the mess on the back of the taxpayers is just plain wrong.The FBI investigation is going to be the first in a long line of probes.

    The lawyers should make tons of money. Is there a futures market for billable hours?

  29. christofay says:

    I haven’t seen Sec. of the Treasury Paulson’s name yet.

    How far down the line does this go? At some point it might reach someone I know. Does it go that far into your neighborhood?

    What about Greenspan? He has pulled in dough since the retirement. Chris Cox I guess is not liable for his 2004 decision.

    What about Congressmen who accepted donations from Frannie/Freddie? Should they take the same amount out of their re-election fund and contribute it to the national debt? Surely there is some responsibility there to share.

  30. Hal says:

    it is called pay for performance

    it applies to govt, medical, business, and sports.

    its what should occur in a free economy

  31. Hal says:

    it is called pay for performance

    it applies to govt, medical, business, and sports.

    its what should occur in a free economy

  32. fresno dan says:

    I pretty much agree – but the serious point that needs to be raised is: Is the shareholder model all it is cracked up to be? How can Chuck Prince’s compensation contract ever be considered rational?
    I think it is much scarier than these guys are evil – they really, really did not know what they were doing. But neither did the shareholders.

  33. Jon H says:

    How about the corporate art collections?

    Can we take those?

  34. Jon H says:

    Seems like any clawbacks should not be limited to the top executives, but should include all the top earners at the companies.

  35. Dollar wise, clawbacks do not contribute meaningfully towards offsetting the bailout.

    But they WILL stand as a warning the next time an Angelo Mozillo comes along and wants to play the same game.

    Also, if any money is successfully clawed back, does it open the members of the board to shareholder lawsuits?

    That would do even more to keep the next generation’s Tan Man in check.

  36. jkw says:

    Don’t forget Henry Paulson, CEO of Goldman Sachs until a few years ago. I’ve heard he got close to $500M too. Perhaps that is why he is fighting this so hard?

  37. Loren Steffy says:

    BizLinks and Open Comments | 9.24.08

    Executive pay packages raise hackles in Congress Buffett to Invest $5 Billion in Goldman ($) Paulson’s former firm to be among largest beneficiaries of bailout — we should have seen this one coming F.B.I. Looks Into 4 Firms at…

  38. man from nantucket says:

    Hal:

    I agree pay for performance is crucial in a Free Economy….however, poorly constructed pay contracts can have hugely negative impacts on companies, society, etc. An improved system would limit the ability to pump current performance to get a huge payout when the short the term pump has negative long term effects. That is what people get angry about is when huge payouts are made when it is clear the short term results were illusory and actually have a materially negative long term impact on the company. That’s the crux of the issue.

  39. pmorrisonfl says:

    > Congress could simply pass a law boosting
    > the tax rates on “earnings” above $1
    > million and include provisions to nail
    > stock option compensation to boot.

    This is a good start; I think the entire net worth of every executive team and board should be looked at. Any firm taking a single federal dollar in this bailout should put its managers (the execs, boards, sr. manager) compensation for the last decade first in line to pay for the dollars spent. I’d include any administration official, particularly any who came from the financial industry.

  40. Jon H says:

    This shit happens every ten years.

    I want bodies in gibbets hanging on the lamp posts of Wall Street, in perpetuity, to remind Wall Street not screw up.

  41. CNBC Sucks says:

    @LooksLikeItIsTooLateToWakeUpAmerica – Are you the European fellow who posted here before under WakeUpAmerica? I liked your previous posts, and would love to hear what you think of clueless Europhobe Joe Kernen.

    Does anybody actually watch CNBC with the volume on anymore? I can stand about 30 seconds at any one time, and at a frequency of no more than once per hour.

  42. How about asking the deeper question of where they got all the money to earn such massive bonuses and set up such massive parachutes? Absent artificially low interest rates from the Fed — and their capacity to defend them by expanding the money supply, you don’t have this problem developing in the first place, and you don’t have Wall Street and the Banks playing with cash / credit quite literally minted out of thin air — cash that gets its purchasing power at the expense of the middle class the flunky politicians are now claiming they’re out to protect.

    If they really cared about the middle class, they’d end the legalized counterfeiting scheme of fractional reserve money supply creation and the privately owned Fed Reserve banking cartel. Really, without that ability to defend low rates, you never have the massive rip-off of trillions from the productive sector that get’s reallocated into reckless bubble ventures, Wall Street Ponzi-finance binges, and the mega bonuses to the fleecing class bloodsucking the real producers from Wall Street.

    Besides, why should some get to play with freshly minted money that get’s its purchasing power by confiscating it from producers and savers? You or I do that, and the Secret Service will have us behind bars in no time.

  43. wunsacon says:

    The trillions at stake here through this massive “book-phantom-profits” fraud are obviously economically significant and have many roots. But, one of them is executive pay. When it’s possible to bring home millions and even billions by cheating and screwing your shareholders, then people are MORE LIKELY to cheat. I’ll call it “Revenge of the Laffer Curve”. That is: give people more of chance for an enormous payday (and keep it after taxes) and watch the white collar crime increase, to the financial detriment of shareholders and even the public.

    If incentives were better aligned with performance, we’d have fewer problems. But, given the sums involved, the players wield such large lobbying power that they game the system further to their advantage and make the game one of “heads-I-win, tails-you-lose”. (It’s not like all the execs gets together to sit in a room to decide these things. Sometimes they do. But, more importantly, they mostly give their money to the same people/lobbyists/politicians that advance their individual interests.) That is, they make sure they’re paid for whatever metric is most flattering (or, if none, then still a king’s ransom). Once they’re able to pocket huge sums for POOR or MEDIOCRE work, then there’s no longer an incentive to do GOOD work. For instance, it even becomes “appropriate” for them to play follow-the-leader in a race to sell worthless bonds to the GSE’s.

    Also, are Japanese CEO’s less competent than American CEO’s? Why is the ratio of executive-to-peon pay so much lower in Japan (or elsewhere)?

    There’s so much positive reinforcement in the business media that many people look askance at anyone who argues the above points.

  44. Jagamohan Swain says:

    They should shoulder all of the costs.First their ill-gotten wealth needs to be cleaned up, then investor equities and later liabilities.I have serious reservations if Congress is going to accept the proposal in current shape.Profits are privatized and losses nationalized?? What kind of society is this??

  45. wally says:

    Pay for performance is fine… but so is returning something to the country that let you perform.

    Wealthy people should pay a much higher percentage in taxes than the less wealthy. That was a socially accepted fact in this country for many decades until the greed era began. the greed era has now nearly wiped us out – time to end it.

  46. Expropriate says:

    How about plain old expropriation of all the money from anyone related to realestate industry – brokers, appraisers, bankers and investment bankers who made more than the median income for the last 4 years…I bet that will come close to the $700B. I know this plan has some collateral damage – some honest joes and Janes will get hurt, then why spread the pain to autoworker, who is already hurt?

  47. roger says:

    Pay for performance worked. Unfortunately, what was performed didn’t work. What was performed was the creation of that rent seeking vehicle, the Shadow Financial System, which is going to fall and crash its (phantom) trillions. The Paulson plan is simply another station in the road the Fed and Treasury have been following to throw money in the black hole, hoping that it doesn’t happen.

    There isn’t enough money in the world to keep it from happening.

    Derivatives are simply bets, and have turned out to be a fantastically expensive way to buffer risks so as to make capital available for productive enterprise. If there is a need for them, they should be traded on an open and structured exchange. Without such an institutional vehicle, they are impossible to regulate or even calculate.

    And I agree entirely with pulaski. You can’t expect people to make massive amounts of prestige money and not game the system, politically and economically. If you want a free market in a consumer capitalist society, you have to put into effect a much larger tax on income – and on wealth. Adam Smith, long ago, observed the pernicious effects of great wealth – and he was right.

  48. LooksLikeItIsTooLateToWakeUpAmerica says:

    @CNBC Sucks,

    yes, I am the very deceived WakeUpAmerica. I watch CNBC often because I work in finance. I like Rick Santelli and sometimes Art Cashin there…with these exceptions you know my opinion of CNBC

  49. In 2005, Paulson got a $38M bonus as ceo of goldman.

    Bernie Sanders talks about this at (gives a good list of ceos and their bonus’):
    http://cspanjunkie.org/?p=567

  50. tradeking13 says:

    This is a windfall profits tax I would support — CEO compensation.

  51. Howard says:

    Hey! This is capitalism, man. First rule is the more you fail the more you make. Just look around everywhere. Car companies lose market share every year for thirty years and the guys at the top got raises every year; MSNBC the absolute ratings dog of dogs pays their bottom rated news show “anchor” (Olberman) $2million per year, Matthews who has even lower ratings gets a reported $1.8 million; all through our society we have no capitalism that I can see. It’s all “crony capitalism” which really means lie loot and steal whatever you can.

  52. DL says:

    I agree with the Dems that if a company gets a taxpayer bailout, then the taxpayers should have a say in executive compensation.

    However, for companies that get no bailout, there should be no regulation of pay.

    As for the chart presented by BR above, another ratio to consider is that of CEO salary versus market capitalization of the companies.

  53. annon says:

    Keep up the good work.. I worked for a company that was sold to Lehman for obscene amounts of money.. Only the owners walked away with the billions. The people at the company who worked for them for 20 years got maybe only a few shares of Lehman stock.

    They are currently vacationing off the coast of Turkey on their 150 foot boat.. Rafting of the boat are all the ex-CEO’s congratulating each other for the billions they walked away with and LOL about “trickle down” .. Ha Ha…

  54. Jon H says:

    “MSNBC the absolute ratings dog of dogs pays their bottom rated news show “anchor” (Olberman) $2million per year, Matthews who has even lower ratings gets a reported $1.8 million”

    How can Olberman be the bottom rated news show if Matthews has even lower ratings?

    Piss off, innumerate wingnut.

    Oh, and we know it’s you, Tucker. Bitter that the liberals on MSNBC are doing better than your show ever did?

  55. Ritchie says:

    Jon H: “Matthews who has even lower ratings gets a reported $1.8 million”

    In the last day or two I read that he earns about $5 million a year.

    Does he have a second job?

  56. The Logician says:

    It is telling that the New York Times, the hometown rag of the financial industry, would refrain from publishing a list of the people people, by name, with the amount of loot they took.

    While I do agree that the amounts paid to these people, when taken together, are a spit in the ocean compared to the amount of the bailout, I also think that’s the wrong way to look at the issue.

    The men (and yes, they were all men) who looted these companies are criminals, plain and simple. Unfortunately, in most cases there probably won’t be a damn thing anyone can do to get the money back. The constitution prohibits the passage of ex post facto laws, and bills of attainder.

    We might be lucky and have some of the investigations of the various companies yield prosecutable offenses, but it’s a rare CEO who leaves his own fingerprints at the scene of the crime so no one should get their hopes up too high.

    Of course, as it concerns the future, I great deal can be done. Congress should start by declaring any cash compensation more than $1 million a year, including benefits, to be non-deductible as a business expense.

    A new income tax bracket for incomes over $1 million should make such salaries less pleasant to receive, and full FICA taxes should be imposed as well, both on the corporation and on the individual.

    As for stock compensation, the S.E.C. should impose much tougher rules on the granting of options to upper management, and Congress should very heavily tax large awards. Hit them where it counts.

    These things should be done regardless of what happens with the bailout.

    As for the bailout itself, I think Congress should think outside the box here. The Republican administration has proposed a $700 billion economic stimulus package. I agree! Now, do we really need to spend it on some financial companies in New York? I’m not quite so sure I agree with that!

  57. Reno Dino says:

    A list of Maria Bartiromo’s best friends. I bet they give great parties in the Hamptons. Such a cozy little club. Now they want another trickle down solution to the mess they made. Give them more money and they will disperse it after taking their cut. After all they know best. They’re rich aren’t they? That’s the crowning achievement in America by which everything else is measured, isn’t it? My most cherished TV moment is when Maria licked her ample lips and said, “Sovereign Wealth Funds Are Sexy.” Yummy.

  58. popo says:

    If the idea of reaching into the wallets of EVERY SINGLE AMERICAN isn’t unconstitutional, then it’s certainly okay to claw back every dollar these failed businesspeople have made over the past 5 years.

    Running up a tab in the TRILLIONS should be a jailable offense. Why are we feeling the slightest unease at fines?

  59. JustOne says:

    I agree with Reno Dino. If you are now or have been an employee at director or higher level within the last 5 years of any company that requires tax payer support due to this “crisis,” any compensation above that of the average employee in the firm should be frozen and the assets returned to the company in exchange for an IOU from the company. These “loans” would then be just one more creditor claim against the assets of the company when it is liquidated in bankruptcy. And it should be a lower priority claim than that of a common stock holder that actually purchased stock in the company based on the fictitious “value” of the company expoused by these managers. If the values were real, the loans would be good and the employees would loose very little. If not … well get in line.

    Certainly this is no more draconian than the actions of federal marshals that would seize my home and bank accounts if I were to refuse to pay the taxes required to support a Government bailout. Real payments based on real values … no problem. Based on overstated value … unreal.

  60. zed says:

    When will the big NYC Law firms fall?. These are some of their bigger clients.

  61. Dan says:

    It’s not just the execs. They need to cap the bonuses of traders and various other MDs.

  62. DickeyFuller says:

    ~

    It’s called ‘fraudulent conveyance’ to move assets once the firm is in the ‘zone of insolvency,’ e.g. liabilities exceed assets.

    If any one of us mortals transferred assets prior to seeking protection in BK, our creditors are legally empowered to ‘claw back.’

    Paulson and Bush are just putting us off with the statement that they have accepted provisions to cap compensation.

    I’m hearing that the bill says that up to $1 MILLION PER MONTH is OK. The caps are just on the bonus calc.

    I guess Bush and Paulson consider $12 million per year to be poverty-level.

    The level of entitlement is just mind-boggling.

    ~

  63. dwight baker says:

    WHO HAS REFUSED TO ACCEPT THE CLAIMS
    THAT HAS NOW RESULTED IN THE BLAME
    THAT ALLOWED AND APPLAUDED THE LAUD OF FRAUD
    NONE OTHER THAN CONGRESS?
    By Dwight Baker
    Monday, October 06, 2008

    The wheels of commerce and trade around the world today are screeching and grinding to a halt. As WE THE PEOPLE of THE UNITED STATES OF AMERICA in the west are beset with an unjustifiable, baseless, moronic CONGRESS that has caved into the many failed and frocked with fraud BUSH BUNCH NEO-CON agendas. And in doing that the RULE of LAW in our CONSTITUTION has been held in derision when hard decisions have come along and thus CONGRESS winked at the RULE OF LAW as having no more legitimacy.

    Thus in simple terms THE RULE OF LAW as it stands now in America today is just the SEE-SAW YAW of law. Hence our CONSTITUTION has no more strict substance that remains and ALL can be interpreted depending on the circumstances. Therefore those in our CONGRESS most coming from the school of LAW seem to prevail and taking what they want from WE THE PEOPLE very open handily and characteristic of their profession composed and drafted in private cherty and secretively. Thus when making claims of deeds done for WE THE PEOPLE ALL seems very hazy and reveled guardedly. The games that CONGRESS has been involved for the last several years is to deny the RULE OF LAW to which the oath they took to uphold.

    Therefore the only good signal that WE THE PEOPLE can send around the world that things will change for the better in America is to demand that CONGRESS recall all that testified before CONGRESS in the frocked with fraud PAULSON and BUSH plan and after them taking oaths or if they do not agree to do so, recall the PAULSON and BUSH PLAN now as law then annul it.

    Now who among us can push CONGRESS ALONG to do right not wrong for WE THE PEOPLE? Who can deny that they do not love America as it has stood as a beckon of light for the world to emulate? And who can deny that over the last forty years many vile, evil and loathsome ones have attempted to steal our rich heritage? And who can refuse to acknowledge that those many efforts of beast like savagery has been done at the will and hands of our elected political officials and judges in our UNTIED STATES OF AMERICA?

    WE THE PEOPLE urge our Professional MEDIA to expose the truth as never before with statements of the EXACT FACTS comprising the TRUTH then hold CONGRESS and others to their sworn duties of recalling the witness of the PAULSON and BUSH BAILOUT PLAN then proceed rapidly to annul it. Because many that testified before CONGRESS committed fraud.

  64. jz says:

    It’s funny how no one is blaming the government for this when in actuality, this mess is mostly their fault. If you claw your way up to CEO (and you do so not by being productive but with clever alliances and making sure everyone under you is incompetent or worse than you), you fill a Board of Directors full of people who have one very rare trait, thinking you are underpaid.

    Does anybody not know this? We as a society do not have the right to take back money from these crooks. Shareholders do.

    Every one of these BOD members who okayed these compensation packages should have their asses sued off for breach of duty. Every CEO and CFO who signed off on these bogus valuations, like Fuld did certifying a $25 book value weeks before Lehman went under, should be prosecuted for fraud.

    The issue to me isn’t the money as much as the lying and cheating. Why in the hell are these guys not doing perp walks or spending day and night in civil courts?

    Oh, and no more Delaware corporations where civil cases are decided by a bunch of judges who practically on the take from Corporate America. Delaware gets 25% of its state revenues from incorporation fees. How in the hell can these judges be objective?

    Can someone tell me why in the hell a bank that has all its branches in California be allowed to be incorporated in Delaware?

    And how about some enforcement of this clause of the Business Judgement Rule, “As part of their duty of care, directors have a duty not to waste corporate assets by overpaying for property or employment services.” Has there been one successful lawsuit against a BOD using this clause? From what I have seen, the BJR allows BOD to act like morons and courts not to question the actions a BOD has undertaken.

    And finally, we need a scorecard of judges who dismiss shareholder lawsuits on the basis of corporate motions. Shareholders, who have lost trillions in the market, should be not denied their day in court by a lazy or partisan judge.

    There is a big difference between suing to get your money back from someone committing fraud and suing to take someone else’s money. Shareholders suing corporations with fraudulent book keeping, greedy management, and unethical BODs are performing honorable acts. They need to be supported not ridiculed.