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Willie Sutton, who said he robbed banks because “That’s where the money is,” had nothing on Richard Fuld.
He’s the Wall Street whiz who headed Lehman Brothers and moved the company heavily into gimmicky investment schemes based on risky subprime mortgages. When those home loans began going bad, so did Lehman Brothers – so bad that it collapsed into bankruptcy on September 15.
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That was, of course, disastrous for Lehman’s employees and for its shareholders. On paper, Fuld also lost money, for his stock options were vaporized in the crash caused by his own reckless policies. Unlike regular folks, however, the CEO had long enjoyed a fat salary, banking nearly half-a-billion bucks in compensation in the years prior to Lehman’s demise. Indeed, last year alone, while his company was teetering, Fuld raked in about $45 million in personal pay. That’s more than $20,000 an hour. For failure!
He got his, even though thousands of people suffered. In fact, he’s still presiding over the remnants of Lehman as it goes through bankruptcy.
But what about all those other Wall Street greedheads we’re now being forced to bail out? No problem, say the White House and Congress, for our bailout bill contains a populist provision to limit the pay of CEOs who get taxpayer funds. Good idea! But the actual language of the bill has a couple of supersized loopholes punched in the executive pay provision. First, the limit applies only to a few banks that the government will actually take over, not those it simply bails out. Worse, the CEO pay restriction doesn’t affect existing pay arrangements. So top honchos who have been wallowing in obscenely-high pay packages, complete with golden parachues, can continue getting those riches, even as they draw bailout money from you and me.
Despite populist pretensions, Washington’s “reformers” are still letting CEOs rob the bank.
“Need a Job? $17,000 an Hour. No Success Required.” www.nytimes.com , September 18, 2008