CEO's Salaries of thses failing financial Institutions

[dewolf]

What sort of money are these CEO's on and do they deserve it. Should they be made to pay back the millions they have 'earnt' from mum and dad investors who are left with nada.

[turbo6bar]

Originally Posted by dewolf

Should they be made to pay back the millions they have 'earnt' from mum and dad investors who are left with nada.

I'm leaning towards stoning, caning, branding, and perhaps execution, but I suppose your proposal would suffice.

[VaSteve]

I don't know how these guys can turn on the TV or open the paper and read about the mess they have made and not feel bad in some way. $85B with a B? WTF?

[Rob Channell]

It's good to be the king. I bet they don't mind floating down on the size of that golden parachute.

[dentist90]

Fat lot of good it is to have deposit insurance for your bank holdings when the company that insures your bank also goes under!!

Let's just hope all these federal buyouts don't lead to national bankruptcy. How are US treasury bonds doing now, BTW?

[Drdogface]

Ya know...there has ALWAYS been something about that 'Full Faith and Credit of the U.S Gov't" quote/promise that has bugged me. Now I'm living that night mare.

[Hugh R]

What I don't understand about these firms is the "Partner" thing. If you got $10 million in bonuses last year and this year the firm is BK, shouldn't you be personally responsible for some share of that, as in you own part of the firm and you're personally liable for those loses. Not a bad business model if you're on the receiving end. Play fast and loose with OPM (Other Peoples Money) and you have no personal downside. Sweet!

[74-911]

Originally Posted by Hugh R

What I don't understand about these firms is the "Partner" thing. If you got $10 million in bonuses last year and this year the firm is BK, shouldn't you be personally responsible for some share of that, as in you own part of the firm and you're personally liable for those loses. Not a bad business model if you're on the receiving end. Play fast and loose with OPM (Other Peoples Money) and you have no personal downside. Sweet!

+1
Every year you would read about the multimillion $$ bonuses that the "partners" were receiving when things went well.... no responsibility at all when the bottom falls out. Sweet deal if you can get it as Hugh says..

As to the govt. going bankrupt? Can't happen as long as they don't run out of paper to print new money on.

Also read the the interest rate on new 3 month T-bills is effectively 0%...

[Noah930]

Originally Posted by VaSteve

I don't know how these guys can turn on the TV or open the paper and read about the mess they have made and not feel bad in some way. $85B with a B? WTF?

Why should they care? They may make more money in their annual bonus than you may in 10 years, combined. (And I know this is a Porsche board.) Not to mention their regular salary and golden parachute, which are worth even more. They're "crying" all the way to the bank. Business is business. The fact that they've brought disaster to the entire American financial market, impacted the entire world financial market, and maybe have started the downfall of America's position as the world's financial giant (is that overly dramatic, or just prophetic?) is of no concern of theirs. After all, they've got theirs.

[Noah930]

Originally Posted by Hugh R

What I don't understand about these firms is the "Partner" thing. If you got $10 million in bonuses last year and this year the firm is BK, shouldn't you be personally responsible for some share of that, as in you own part of the firm and you're personally liable for those loses. Not a bad business model if you're on the receiving end. Play fast and loose with OPM (Other Peoples Money) and you have no personal downside. Sweet!

Isn't that the beauty of corporate structure? You get a cut of the profits. But when the ***** hits the company fan, you're personally protected from any real liability.

Maybe we should start a new Pelican thread on what the braintrust thinks will be the next BIG THING that can be saved by government bailout. Start working on that business model at the basement level. We'll all be rich, together.

[svandamme]

all payment and contract stuff for these cat's can be found on sec.gov... takes some digging, but it has to be there...

i don't recommend it though, it can almost guarantee you it will depress you when you find the info

[HardDrive]

The head of Lehman Brothers made $22.1 million dollars last year in total compensation.

American International Group will give outgoing CEO Martin J. Sullivan a severance packaged valued at $47 million. Sullivan’s resignation took effect July 1, according to a Reuters report: http://www.directorship.com/sullivan-to-receive--47m

[Rick Lee]

I don't see how cutting anyone's pay is supposed to make them perform better. That rule works for everyone from dishwashers to CEO's. I think these suggestions are a function of people's jealousy and outrage more than any real constructive solutions for preventing what's going on now from happening again soon. Besides, from what I've read on this financial crisis, most of the blame is on politicians for voting for or against whatever legislation or not doing enough to rein an industry in. How is cutting CEOs' pay gonna change politicians' behavior?

[87coupe]

So you think the guys running these institutions who took on a ridiculous amount of risk thus BK'ing the company should get these massively over inflated salaries in spite of their performance? Not to mention what their MBO packages look like - those numbers are for when they completely fuched up. The actual numbers for what they would have made had they actually done their job right are much higher.

[Rick Lee]

Originally Posted by 87coupe

So you think the guys running these institutions who took on a ridiculous amount of risk thus BK'ing the company should get these massively over inflated salaries in spite of their performance?

Now, did I say anything close to that? I said nothing at all about supporting their huge payouts. But what I fail to see is how cutting anyone's pay makes them perform better. Please tell me how that works and leave out the class envy and jealousy.

I actually couldn't care less how much they earn. If I don't own stock in their company and my taxes don't go to support their salaries, I fail to see why I should care what they earn. It's none of my business. At the very worst, they pay a TON in personal income taxes, more than many of us combined will pay in a lifetime.

Now, if someone can demonstrate to me how their making less money would make their companies more stable and profitable, I'm all ears.

[87coupe]

Performance based compensation is a great idea and is almost universally implemented at every corporation in America. So since you mentioned it; yes, cutting someones compensation for poor performance is a great idea, it accomplishes one of two things (1) individual works harder/smarter to return to previous pay, or (2) individual leaves. Either way the problem sorts itself out.

No class envy or jealousy here. I live in one of the most expensive places to live in the world and my total monthly expenditures are currently 22% of my gross income and I have zero debt. I'm 34 years old and doing just fine.

Cheers,

[911Rob]

It's the ultimate American Welfare System.... Bankruptcy!

All started when Gubmit thought they should be involved in Business and not just Gubmiting.

I've been on the "NON"-receiving end of BK and have some strong opinions about the whole matter; just keeps getting worser and worser until now, the ultimate in "Take for Free".

Along the same veins; I actually have a very good, personal friend that was a big CEO and he almost went to jail for cashing out for $8 Million prior to his company going BK. He really worked hard for that company; and he didn't do anything wrong - that is what you or I wouldn't have done.

He was on top of the world and then it all came tumbling down; but he survived, lives like a King today.

[Bill Douglas]

And some of the mistakes these noddys make... I can't believe it. A bunch of school kids could do a better job.

[dewolf]

Originally Posted by HardDrive

The head of Lehman Brothers made $22.1 million dollars last year in total compensation.

Honestly, is this sort salary necessary? That is @$400,000 per week earned mostly from mum and dad investors.

[911teo]

Hold on one second. I thought you guys were for a free market, where market forces decided how much people should be paid.

Skilled workers should be paid according to their capabilities. Who decides how much? Do you think it should be the government? Sounds a lot like a sort of socialism/communism to me.

Which is fair enough. I am much more socialist that a lot of you guys bein European... But I am surprised seeing this on PPOT.

Maybe it's when it happens to someone else then the govt should jump in and make some individual give back what they earned fairly and squarely.

There is a board that decides how much the managers should be paid. There is a shareholder assembly that decides who sits on the board. If the equity investors were unhappy they should have said something.

But no, everybody was super cool when Lehman went up 100% from May 2005 to Dec 2006. It was still up 50% in Feb 2008.

Should we call all those investors that sold and made a profit back and tell them they have to give back (to whom?) some money because the CEO (it was the same then as he is now, Dick Fuld) turned out to be an idiot and they did not do anything to send him away?

Lehman made billions in the last 3 years, until they screwed up and lost.

This is the markets people...

Maybe we should turn away from capitalism. Socialism and Communism have failed. Capitalism in the Western way has failed... Maybe we sould meet somewhere in the middle....