Pre-Crisis Financial Company CEO Compensation

Since CEO compensation is back in the news, I thought we might want to revisit this collection of excess via Bailout Nation:

Pre-Crisis Financial Company CEO Compensation

• Lehman Brothers Chairman and CEO Richard Fuld Jr. made $34 million in 2007. Fuld also made nearly a half-billion—$490 million—from selling Lehman stock in the years before Lehman filed for Chapter 11 bankruptcy.

• Goldman Sachs always pays its top executives handsomely: Chair- man and CEO Lloyd Blankfein got $70 million in 2007. Co- Chief Operating Officers Gary Cohn and Jon Winkereid were paid $72.5 million and $71 million, respectively.

• While Bears Stearns was rescued by a $29 billion Fed shotgun wed- ding to JPMorgan Chase, former chairman Jimmy Cayne received $60 million when he was replaced.

• American International Group CEO Martin Sullivan got $14 million in 2007 (he was thrown out in June that year). Robert Willumstad was handed $7 million for his three months at the helm (Edward Liddy took over as AIG’s chief executive in September 2008). So far, the tab for AIG’s bailout is $173 billion.

• Morgan Stanley Chairman John Mack earned $1.6 million plus stock in 2007. CFO 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—a record.

• Founder and CEO Angelo Mozilo of Countrywide Financial, which was at the forefront of the subprime fiasco, cashed in $122 million in stock options in 2007; his total compensation over the years was over $400 million.

• Stan O’Neal, who steered Merrill Lynch into collapse before being deposed, was given a package of $160 million when he left his post in 2007. That package makes his successor CEO John Thain’s $17 mil- lion in salary, bonuses, and stock options in 2007 look like a bargain. (That may explain why Thain used $1 million of company—and shareholder—money, rather than his own, to redecorate O’Neal’s old office.)

• Bank of America CEO Kenneth Lewis brought home $25 million in 2007. Bank of America acquired Merrill and Countrywide in 2008 and has thus far received $45 billion of direct government bailout money and another $300 billion in asset guarantees.

• JPMorgan Chase & Company Chairman and CEO Jamie Dimon earned $28 million in 2007. JPM Chase acquired troubled invest- ment house Bear Stearns in March 2008 with the Federal Reserve backstopping $29 billion in Bear assets to help get the deal done.

• Fannie Mae CEO Daniel Mudd received $11.6 million in 2007. His counterpart at Freddie Mac, Richard Syron, brought in $18 million. In 2008, the federal government took over the firms’ combined $5.5 trillion mortgage portfolio, with Herbert Allison to serve as Fannie CEO and David Moffett the new CEO at Freddie.

• Wachovia Corporation Chairman and CEO G. Kennedy Thompson received $21 million in 2007. He was succeeded by Robert Steel as CEO in July 2008. Steel is slated to get a $1 million salary with an opportunity for a $12 million bonus, according to CEO Watch. Wachovia merged with Wells Fargo in late 2008 in a deal notable for its shocking lack of government involvement.

• Seattle-based Washington Mutual was scheduled to 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. It was seized by the FDIC in the fall of 2008, and in October was acquired by JPMorgan Chase.

Perhaps James Montier was not so far off when he called Shareholder Value “The World’s Dumbest Idea” . . .




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