Turning Lead Into Gold: How CEOs' "Performance Incentives" Are Screwing Everybody
Continued from previous page
Last January, Chenault pocketed options to buy nearly 1.2 million shares at a moment when American Express stock was trading at a bargain basement price of $16.71. Thanks to the bailout generosity of U.S. taxpayers, American Express shares have risen steadily in 2009, trading at around $32 in recent weeks. That’s still only half what the credit-card giant’s shares were worth at their peak in 2007. But Chenault still stands to make, from his 2009 options alone, nearly $18 million.
Chenault doesn’t stand alone. At SunTrust, options awarded early in 2009 have so far upped the personal portfolio of the CEO and two fellow execs by $7.9 million. The comparable gain for Capital One CEO Richard Fairbank: $16.3 million.
Alchemy, in whatever guise, has always been a racket. To get our economy moving again — with more than smoke and mirrors — we need to go after the racketeers. We need to place real limits on the rewards that racketeering can bring. That’s something that Congress and the Obama administration have, at least so far, not been willing to do.
Sarah Anderson directs the Institute for Policy Studiesâ€™ global economy project. Sam Pizzigati, an institute associate fellow, edits Too Much, an online weekly on excess and inequality. They are co-authors of the recent IPS report Americaâ€™s Bailout Barons: Taxpayers, High Finance, and the CEO Pay Bubble.