Posts filed under “Wages & Income”
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 (
BSCJPM)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 (
CWFBAC) 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.
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.
What’s Wrong With Billionaire Fund Managers? (April 2008)
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
Bailout should cut the cords of golden parachutes
The Patriot Ledger Sep 23, 2008 @ 06:30 AM
In Bailout Furor, Wall Street Pay Becomes a Target
NYT, September 23, 2008
More nonsensical tripe foisted upon the world by W. Michael Cox and Richard Alm again. For those of you who may not recall, they are the senior vice president/chief economist, and the senior economics writer at the Federal Reserve Bank of Dallas. These two have started a cottage industry dedicated to proving how great things…Read More