Go, Economy!

[Type Ryan]

If this doesn't turn your stomach, there's something wrong with you. This is why I hate greedy CEOs and believe their greed is exactly the cause of our current economic status.

Richard S. Fuld Jr., chief executive officer of Lehman Brothers, declared to the committee "I take full responsibility for the decisions that I made and for the actions that I took." He defended his actions as "prudent and appropriate" based on information he had at the time.

"I feel horrible about what happened," he said.

Waxman questioned Fuld on whether it was true he took home some $480 million in compensation since 2000, and asked: "Is that fair?"

Fuld took off his glasses, held them, and looked uncomfortable. He said his compensation was not quite that much.

"We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders," he said. Fuld said he took home over $300 million in those years — some $60 million in cash compensation.

Waxman read excerpts from Lehman documents in which a recommendation that top management should forgo bonuses was apparently brushed aside. He also cited a Sept. 11 request to Lehman's compensation board that three executives leaving the company be given $20 million in "special payments."

Fuld's compensation wasn't that much?!!! Are you kidding me? I'm glad the government didn't help Lehman out.

[burgundy]

people who have to manage money have to be paid exceedingly well. otherwise they will always almost be corrupt. and i don't think any of this (at least at lehman) was corrupt, just shortsighted.

[Type Ryan]

So do you agree that "$300 million in those years — some $60 million in cash compensation" wasn't fair compensation?

I understand that the more skilled labor you peform, the more you earn (i.e., garbage collectors vs doctors), but to say that much money wasn't enough compensation is disgusting and an example of what's wrong with corporate america.

I would understand a few million or even $60 million during those years given the responsibilities he had, but to complain about only receiving $300M?, come on.

Corporate executives are just as corrupt as the politicians from whom they try to gain favor. edit: most of them, anyway.

[kingoffighters]

It is not enough when you have 7 ex-wives, 10 mistresses and 100 kids to feed.

[Nash]

It is not enough when you have 7 ex-wives, 10 mistresses and 100 kids to feed.

Yeah, just ask Shawn Kemp. He'll tell you what's up.

[Port]

people who have to manage money have to be paid exceedingly well. otherwise they will always almost be corrupt.

That's just sad, but I know it's human nature at work.

[burgundy]

the market pays what you are worth. if fuld was only paid $60M, he would have been that much more likely to abuse his authority to the detriment of many many many many many billions of dollars.

i think the problem isn't the level of compensation, but the effective period on which it is based. too many executives chase short-term goals at the expense of long-term stability, and this is where regulation needs to be applied.

lehman is the juicy story, but don't ignore a guy like john thain at merrill, who took over a firm that had worse exposure than lehman, wrote down massive losses to get bad debt at the door, and saved much of that business.

[Type Ryan]

I don't know, and I'm not going to claim I'm an expert on the subject and I don't have the numbers readily available, but CEOs like Fuld and many others made (shitty) decisions based on the level of compensation they received as CEOs. As a rule, CEOs get paid based on how well the whole company performs. If the company does shitty, they should be paid accordingly. If it does well, then should be paid accordingly. However, that's not how it works. CEOs of these failing institutions continued to get paid mass amounts of money, while the people from whom they took their money, ultimately paid for their failure.

I don't think there's a problem with the way CEOs get paid, per se, but I do think the problem is based on compensation, and not the effective period.

For example, did you know that the former CEO of WaMu was paid $19M dollars for 17 days worth of work? To me, that's absolutley ridiculous, especially for a sinking financial institution. Granted, he wasn't the cause of WaMu's downfall, but $19M for barely 3 weeks worth of work? I'm sorry, but that's complete and total bullshit.

[MarsKitten]

17 days and he earned about what 10 average people pull down in a lifetime? Nice. America's lesson these last 8 years for me is work moderately well, never question the orthodoxy, always be loyal to the company and unless you get raped by your superior the company will have your upper management back.

[burgundy]

i think that executives should be required to be paid mostly in company equity that they should be required to hold for a long period. basically their bottom lines need to be synced with those of the shareholders.

the name of the game is greed. that's good, and that's what makes capitalism run. but when greed goes unchecked, and even prudent firms are seduced by the exploding profits of their competitors, and no one really knows what any of these things are worth, certainly not the rating agencies, and regulators are asleep at the switch...that's when disaster happens.

i'm not saying these guys are blameless. they're not. but there's plenty of blame for everyone. you cannot even imagine how much some hedge funds have made off of this. one fund specifically requested the shittiest of the shitty mortgages so they could reap the high yield, knowing full well they would go bust, because they took out credit default swaps as insurance on the security that was somehow rated AAA.