Question/Comment: Last year Lehman Brothers’ CEO Richard Fuld, Jr. made $71 million. Today his company collapsed. How much will he make this year?
Paul Solman: I don’t know about this year. You’ve covered last. In 2006, according to Forbes.com, he was the 5th highest-paid CEO in America: “Total Compensation $122.67 mil; 5-Year Compensation Total $375.81 mil.”
He made that money largely in bonuses and stock options, based on “profits” that turn out to have been a mirage, a mirage that deluded stockholders to invest, lenders to extend credit, counterparties to enter into good-faith contracts. We reported in detail on CEO pay extravagances several years ago: you can find them here, here and here.
(Though I chickened out from really confronting GE’s Jack Welch on the issue when he claimed one of our reporters had gotten him to agree to an interview under false pretenses)
For all the reporting, a lot of good it did anyone. Can people sue Fuld for his prior gains, I wonder?
ADDED ON SEPT. 17: FROM THE VERY ASTUTE ECONOMIST, DEAN BAKER:
“We don’t want a meltdown so the Fed had to act, but it can place conditions. For example, it can say that from September 18th forward, no company will be eligible for AIG (or Bear Stearns or Fannie/Freddie) creditor protection if any executive gets more than $2 million a year in total compensation.”
There it is, a free market deal. The Fed offers protection for the financial system but only for companies who are not run by overpaid buffoons. (If the bosses aren’t buffoons, then they don’t need the protection, right?)
We want the Fed to protect the financial system, but let’s get something for our money, instead of just handing it over to the richest people in the country, no questions asked.