Golden Parachutes: How the Bankers Went Down

We could have balanced the California budget with these payout packages… I don’t understand how the banking industry and the crooks at the heads of these companies can get away with this.

Anybody got a sniper rifle? I’d like some of my taxes back from these idiots

Nice visual. The tragedy is that practically every public company in America has some sort of golden parachute for their executives. What is needed are “Tin Parachutes,” compensation for laid off workers at these companies.

If you are a shareholder, there are steps you can take. Read http://globalinvestmentwatch.com/2008/12/28/vote-no-and-vote-often/ for some ideas in this vein.

There are some indicators that this might change. President Obama spoke directly to the issue of executive greed in his address last night. Stay tuned…

this is white collor crime in your face the courts are even set up to accommodate these guys buy putting them up in prison where you can pay to have food brought in linens and so on.they say if you steel more than $50,000,000.00 you go to these nonviolent prisons.but i guess if you steel even more like ma doff you get to stay in your on place.steel a 6 pack go to jail steal million and wipe people out get a slap,behind closed doors.

I’m speechless…
it’s just stunning to me that people can get so much money beyond even their huge paycheck.
crazy…

Well nice to know someone is doing alright out of the recession. Maybe if the Bush administration had proposed a bailout with proper strings attached or if Congress had acted on behalf of the public this wouldn’t have happened.

I think the bankers concerned and all law makers in charge (Past and present) should be indicted for defrauding the public of billions – like about $1.5 Trillion in the two bailouts.

Alan Fishman wins! Headed WaMu for 17 days and took away $19 million!

Even I would be willing to head WaMu/Chase for a few days at the $1.12 million per day rate. But, my PA would have to be HOT, or its no deal!

MJ was paid $30 M a year back in the mid-90’s. Other athletes make more than most of those “golden parachutes” yearly. Let’s cut the populist hate and realize these guys are getting paid fair market rates.

The board of directors and ultimately the voting share holders had to have approved all these golden parachutes in the first place. Apparently, they saw fit to not bother to tie these generous severance packages to performance and tenure. Very expensive way to learn a lesson.

BTW that tax bracket is about 50%. So, Angelo Mozilo’s $188 million was whittled down to about $94. Of course, there are all kinds of tax loopholes that could have beenused to increase the bottom line.

I gave this a lot of thought before I realized Wall St. behavior is no different than my high school job at the Ice Cream shop. Every day, my family would expect me to bring home free Ice Cream, just because I worked there. “After all, there’s thousands of gallons of the stuff. Why would they miss two quarts?”

No one gave a thought to the losses of the owner, it just seemed “right” to everyone that I should do this. Ask yourselves if you ever had this feeling too. I would argue it’s almost natural (though of course I am not justifying it).

Unfortunately, these people deal with Money all day, and it simply doesn’t have the value to them that it does to you and me. The losses they are causing fall in that same unreal blind spot. Just like the Ice Cream, they don’t feel cares or will notice a few million missing from the Trillions they handle all day.

It’s like working in an M&M factory and sticking your hand in the stream for a few nibbles. “Who could possibly notice or care because there is so much?”

Just sayin’.

kudos to Leo Abess and Robert Willumstad for not succumbing to avarice. It is an ugly thing in America that any person can arrive at the point where only 100 times what is needed to survive is enough. Bring back government bank regulations.

“I don’t understand how the banking industry and the crooks at the heads of these companies can get away with this.”
It’s called the Federal Reserve. It is neither Federal nor a Reserve.

The numbers that these people took home are staggering. In no other industry would they be able to take that much home with them while the company fails. The worst part is many of these people took are tax money.

Remember that on the web we read from top to bottom. The graphic seemed like it was meant to be read from the bottom up.

Did anyone not notice that Richard Fuld’s parachute was in september 2007?

Sadly, Capitalism, the cancer of democracy, breeds and exhaults a certain type of anti- social psychosis. We tend to follow, without question, the ruthless sociopath and denigrate the reasonable, practical compassionate human. The American Dictionary must more truthfully redefine the Corporation as a ” pile of money with a sociopath at the top”. The problem lies in the scewed legal rights given a corporation, witch encourage a very dangerous side of the human personality to be favored, and nurtured by high material reward for destructive behavior. Unfortunately, these corrupt monsters took over banking in the U.S.A. and were influential enough to enroll the simpleminded George Bush. The Banksters and their corporate wanabes raped the American people and their country as no other group before, save their oil industry equivalents, the Oil barons, and have left for warmer climates and lives of extreme luxury with bags of the peoples’ money in tow. Unfortunately they did this at a time when the average American lacks even high school education, and most labor jobs, outside the service industry have gone off-shore. This makes any recovery extremely difficult. The Chinese, on the other hand are well equipped to provide everything the white collar classes in America want or need, and at better than half the cost of any domestic efforts. For example: GM struggles with the electric car the ”Volt” and so far, it is really only “Vaporware” while China, using American white collar investors money, have produced a working “Volt” replica and have orders for it from, of all people, Israel! a U.S. “protectorate” SEE: http://www.cleantech.com/news/3983/chinas-byd-sells-first-mass-produced-plug-cars
Any myths about the U.S.A. returning to its former power, are just that, myths. The U.S. will rapidly deteriorate into a third world place of sexual depravity, drunkenness, drug addiction, Elvis worshipers, V-8 engines, crooked OPEC deals (complete with kickbacks to the right folks), memories of “The way we were”, cowboy legends revisited ad nausium, and loud cheap bar music, as the futility in struggling against the monumental Asian population grows. All countries who suffer from the downfall of America will only recover when they re-align themselves with the new Asian reality in the world. Fact: China has more post grad students with IQ’s of 130+ today than the U.S. has high school students, and India is running second to them. Catch this up Yankee Doodle!

C’Mon now people, this is business. It’s 100% ok that these CEO’s get what they get. If any company wants to pay a guy that much to leave, it’s ok with me. Here’s where you should all have a problem: Allowing those companies to survive. they should all go bankrupt if they are insolvent. And yes that means many innocent people will suffer. But isn’t that what’s really required for change? Things only change when it becomes too much. This would be it. Instead WE will save them from themselves. That is the issue here. Maybe some new banks should be created with people in mind instead of selling money at outragous prices (read: high interest). If I started a bank it would be for people with razor thin interest rates. But how do you start a bank?

One thing people seem to forget is that the ceo’s don’t award themselves their parachutes, the board of the company does. Maybe they haggle when taking on the job for a good deal, but who doesn’t.
Have you ever gone on an interview for a career type job and not haggled for some extra vacation or a little more money? It’s the same exact thing, but the numbers are bigger.
If the company makes a deal with an employee for compensation, health benefits, or other perks, I see no reason why they should be able to wiggle out of it just because the company is doing badly, as is the market and lots of other companies.
The real problem is that they manage to negotiate these deals in the first place.
The board can save the company a lot of money by not falling prey to “we want jack welch and we’ll pay anything.” There are plenty of competent people who will do the job for less. And that would be good business anyway.
But I’m not an executive, I’ll never know what really goes on in the boardroom, but I’m sure it has a lot to do with mutual back scratching.

Claw Back, do your research,and never invest in a company if these guys have anything to do with it. They should be ban from
any public traded company.

Isn’t it “golden handshake” rather than “golden parachute”? Golden parachute is used in the case of job loss through takeovers/acquisitions.

A company performance can be 90% credited to CEO who enjoy authority to direct policies. Consider a scenario, A becomes CEO of X bank in 2001 to earn good bonuses, he need to show good profit. He fires thousands of Americans to offshore work and invests in riskier assets (good loans are assets while bad loans are liabilities) and book profit (assuming not cooking in between which is criminal offence). He basks in glory amongs investers while cursed by laidoff employees. In 2007 he reached a point where he cannot layoff more, so no scope of cost cutting (hopefully he’ll not undercut his salary) and he quits smiling with exit bonus and pensions. His successor comes in 2008, sees with horror that most are bad assets while he can’t do much on cost cutting. Who will you blame A or B?

THINK! Shareholders cannot complain since they were accomplice. Shareholders are tax payers too!

And I am Indian with background in outsourcing factory and feel morally obliged to speak truth.

I love the uproar over this. Manny just signed a 2 year 45MM contract and no body thinks the Dodgers have lost their mind. 23 year old Lebron James, whose not even college educated is set to make 100 million. David Beckham 245 million? 100mm to a pitcher to pitch every 4th game? If Manny spends next year hurt, or another athlete stops taking performance enhancing drugs and falls flat, no one calls the player a thief.

These guys are chased and acquired just like free agents in sports. There highly educated and control thousands of lives. When they do great things thousands benefit and when the dont pan out, theyre fired. Theyre savvy businessmen, and they understand market conditions are much larger than them self in some circumstances. They are protected accordingly through signing bonus and guaranteed salaries and thus compensated for the skills they provide. JUST LIKE AN ATHLETE.

Lastly, the guy who founded countrywide deserves every bit of his 100mm. He build one of the largest mortgage companies in the world.

If you look back years ago and ask what would happen to a CEO who did this (corporation accountable to the workers and community), you would be told they go to jail. Fraud is fraud. These CEOs were all picked by a few “Bush gang” recruiters. They were there to steal and destroy. The Justice Department and Presidents look the other way.

I like AJ’s musings only to the extent that carrot and stick policy may not work always. A CEO can tweak with this policy by doing short term good for his company while jeopardising long term prospects. Look at my earlier scenario how CEO A tweaks the system and no body can catch A. This framework of carrot and stick needs to be reworked. And for all those complaining voices,greed created this problem, the same greed will take care to get back things back on track.

>Equality dictates that all persons make a fair income
>commiserate with their education, level of experience, etc.

What a completely arbitrary basis to start an argument from.
Where is it written that the above is what equality dictates?