3 Infuriating Facts About CEOs 5 Years After the Financial Crisis
This piece originally appeared in ThinkProgress: http://thinkprogress.
As part of a series commemorating the fifth anniversary of the Lehman Brothers bankruptcy, the Center for Public Integrity (CPI) published a look at Fuld and executives from Bear Stearns, Merrill Lynch, Citigroup, and Bank of America on Tuesday. Here are three infuriating facts CPI unearthed about the masters of the financial universe.
1. Dick Fuld walked away with half a billion dollars and three homes.Fuld’s $529 million fortune is actually a lot less than he could have been worth had he been able to cash out all of his stock before the Lehman bankruptcy. He had been paid $889.5 million in salary and stock between 2000 and 2007, and at one point his stock options were worth a full $900 million. CPI offers a digital tour of Fuld’s three homes: mansions in Greenwich, Connecticut and Jupiter Island, Florida, and a ranch in Sun Valley, Idaho. When Lehman settled for $90 million with former investors who the firm had deceived through an accounting trick approved by Fuld, it was an insurance company that paid, not executives like Fuld.
2. The former Bear Stearns CEO who walked away with over $300 million plays high-stakes bridge in retirement. Jimmy Cayne oversaw Bear Stearns’s massive gambling on home loans and related financial products prior to the company’s collapse. Today, he oversees a different sort of gambling. Cayne is the number 22-ranked bridge player in the world. He walked away from the company two months before it went belly up, having cashed out $289 million in stock and received another $87.5 million in direct cash bonuses from 2000 to 2007. Cayne and his wife own two Manhattan apartments, a mansion on the Jersey shore, and a $2.75 million condo in Boca Raton, Florida. “He’s paid no judgments or settlements from any lawsuits,” CPI reports.
3. Three bailed out CEOs whose “golden parachutes” were worth a combined $272 million are doing just fine. Charles Prince left Citigroup in 2007 following the announcement he’d lost the firm $11 billion in mortgage-backed gambles. The company paid him $28 million to leave. Stan O’Neal was fired by Merrill Lynch the same month, and the firm sent $161.5 million out the door with him. Ken Lewis left Bank of America in 2009 with a parachute payment of $83 million. All three of their firms had to be bailed out by taxpayers. The three men’s exit payments dramatically understate their total compensation. O’Neal and Prince each have vacation homes in the islands off of Cape Cod. Lewis has sold two homes in recent years but retains a condo in Naples, Florida.
While these stories of huge personal success in the face of clear business failure are infuriating, they are far from exceptional. Fully one-third of the highest-paid financial industry CEOs of the past two decades have been fired, bailed out, or busted for fraud.
Meanwhile, 11.3 million Americans remain unemployed, with tens of millions more having dropped out of the workforce or struggling to survive on low-wage part-time service industry jobs. Those who do have work are earning less than they did prior to the crisis, and American workers as a whole have experienced a lost decade in wage growthdespite boosting their productivity substantially. By contrast, the financial industry that caused the crisis has bounced back rapidly, with record profits and near-record bonuses for its executives.