WSJ and Hightower on Wall Street Compensation
The bonuses and compensation at Merrill Lynch are front-page news in today’s Wall Street Journal; here’s the teaser from their site:
Merrill’s $10 Million Men
Top 10 Earners Made $209 Million in 2008 as Firm Foundered
As bad as 2008 was for Merrill Lynch & Co., it was very good for Andrea Orcel, the firm’s top investment banker. Although Merrill’s net loss ballooned to $27.6 billion last year, Mr. Orcel, 45 years old, was paid $33.8 million in cash and stock, just shy of his pay in 2007.
While Merrill staggered, 11 top executives were paid more than $10 million in cash and stock last year, say people familiar with the situation. An additional 149 received $3 million or more.
Here’s the link, but it’s a subscriber-only article.
Meanwhile, here’s a piece by Jim Hightower on Wall Street compensation from his website:
EX-WALL STREET CEO’S STILL GETTING PERKS
By Jim Hightower | Tuesday, March 3, 2009
Once upon a time, not so long ago, Citigroup was a fairytale financial conglomerate that was the richest corporation in all the land.
But it turns out that Citigroup’s magic kingdom was, like most Wall Street firms, built on fairy dust, and—poof!—the kingdom has vanished. Last year, the once mighty bank lost $18.7 billion dollars, fired 39,000 employees, and was reduced from a golden chariot to a pumpkin. It only survives today because of a $52 billion bailout from taxpayers.
And where are the executive alchemists who created the fairy dust to make Citigroup seem like so much more than it was? These royal princes of the kingdom, who were paid millions for their magical creations, all retired in riches, but you still might find some of them at the bank.
Take Charles Prince, who was CEO of Citigroup until retiring a year and a half ago—just as the fairy dust went poof. Prince Prince, who’d been paid $67 million for his first three years of overseeing the kingdom, was graced with a $10 million bonus in his last year, even though the empire was collapsing around him. But Prince wasn’t sent away. He continues to enjoy a well-appointed office at the bank, an executive assistant, a limo, and a chauffeur.
Even though Citigroup is now on a financial death watch, several other of its former executives continue to draw millions of dollars in personal perks. Sandy Weill, for example, not only has kept an office, staff, and his limo since retiring three years ago, but he’s also paid a consulting fee of $3,800 a day.
You’d hope that at least one of these guys would have the integrity to say, “You know, this is a ripoff, and I don’t deserve it.” Rather than wait for that magical moment, however, Congress should step up now and pull the plug on these pampered princes of greed.
“Bank executives might leave, but perks often linger,” www.statesman.com, February 22, 2009.