In Congressional testimony today, former Lehman Brothers CEO Richard S. Fuld Jr. defended the massive salaries and last-minute payouts to himself and other LB executives.
Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, asked Fuld if it was true that he took home $480 million in compensation between 2000 and 2008. Fuld responded that he only pocketed $300 million, and that “We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders.”
According to the Associated Press (posted on Yahoo), Waxman read from internal company documents that detailed a request to the compensation committee that three departing executives be given $20 million in “special payments.” The request was made on September 11 — four days before the company went bankrupt.
“In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation,” Waxman said before Fuld appeared as a witness.
Waxman also read from other internal Lehman documents that described the response of one executive rejecting a suggestion from employees that top executives forgo their bonuses: “I’m not sure what’s in the water.”