Friday, September 26, 2008

Bailout Is the New Black (Friday)

Well, the main stream media is finally getting around to reporting on the subject that I was ranting about last week. CEO compensation.
This is an especially important topic in light of the bazillion dollar bailout that will come on the backs of taxpayers.
From the AP
Stanley O'Neal walked away from Merrill Lynch with a package now worth about $66 million. Less than a year later, the storied investment house was forced into a takeover by Bank of America.
Ken Thompson was ousted from Wachovia in June with a "golden parachute" now worth more than $5 million, and Chuck Prince was forced out at Citigroup with a parting gift now valued at
$16 million.
and from
For example, the CEO of bankrupt Lehman Brothers, Richard Fuld, received total compensation of 71.9 million dollars in 2007, including stock, bonuses and other pay, according to a survey published by Forbes magazine.
Martin Sullivan, the chief executive of AIG, who left the insurance giant before it was rescued this month by the federal government, received 14 million dollars, a survey in
USA Today said. He also quit with a severance package worth 47 million dollars.
When the government took over collapsed mortgage giants Fannie Mae and Freddie Mac, ousted bosses Daniel Mudd and Richard Syron were not allowed 12.59 million dollars worth in severance payments.
Yet they still got out the door with 9.43 million dollars in retirement benefits.
Two questions remain...
If the CEOs of these failing businesses had been paid even more, would these businesses be in the black now?
If you paying a CEO 14 million for much do you have to pay him for running the business successfully?
Enough get the drift.
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