Golden Parachutes for Failure

We would like to document a few facts about golden parachutes amidst the taxpayer bailout of Wall Street. Fannie Mae CEO Daniel Mudd last year received $8.4 million in compensation. They year before he received $12.2 million in compensation. He started with Fannie Mae in June of 2005; the stock was at $36.00 a share today it is worth $3.16. Next on our hit list is his counterpart at Freddie Mac. That is where CEO Richard Syron was due to receive up to $15.5 million on 2008. Syron was paid $19.8 million in compensation in 2007. When he started at Freddie Mac in 2003 the stock was at $56.13 a share, today it trades at $1.41. The Federal government is trying to stop all further payments to these men. We then move to Lehman Brothers where CEO Richard S. Fuld Jr was paid more than $40 million in 2007 alone, which included a huge amount of restricted stock. He has stated he would forgo a bonus this year. When he was named CEO at Lehman Brothers in 1993 their common stock value was $27.16 today it is worthless. Ousted Sovereign Bancorp Inc. CEO Joseph Campanelli will receive $8.4 million in a severance agreement. The reward is two years salary, bonus pay and an enhanced retirement plan. He was hired in 1999 as CEO when the bank shares traded at $13.57, eight years later the bank share price now stands at $5.62. Washington Mutual, CEO Kerry Killinger had received compensation valued at $14.4 million in 2007. He started as CEO at Washington Mutual in 1991; the common stock price was $24.96 today the stock is worth .11 cents. Lastly, we looked at American International Group CEO Martin Sullivan. He received compensation last year of $13.9 million as well as $15 million in severance pay and a $4 million bonus as his reign ended in June of 2008. The stock in 1997 when he started as CEO was $98.56 a share, when he left it was $26.05. He was replaced by Robert Willumstad, to his credit he told the A.I.G board that he would not accept $22 million compensation he was owed as the stock dropped from $26.05 to $3.87 while he was in charge. We will revisit and see where these folks wind up as we think we will hear from the again.

Leave a Reply