$2 billion pay day for failure

Posted by: Nanette Byrnes on September 25, 2008

The top executives at AIG, Freddie Mac, Fannie Mae, Lehman and Goldman Sachs pulled down more than $2 billion in pay over the past five years according to a new analysis by a professor at San Diego State University’s Charles W. Lamden School of Accountancy, Dr. David DeBoskey.

Henry Paulson, who in his current role as Treasury Secretary is pushing for a bank bailout, accounts for $82 million of the total. That was his pay for three years (2003 to 2005) as CEO of Goldman Sachs. DeBoskey included the pay of 57 different individuals, pulling the data that companies report on their top 5 officials to the Securities & Exchange Commission, to get to the $2.1 billion total.

Now-bankrupt Lehman Brothers, the smallest of the five companies, was tops in pay. It doled out $743 million in compensation for all its top officers from 2003 through 2007. Next was Goldman Sachs with $726.5 million, then AIG at $336 million, Fannie Mae at $207.2 million and Freddie Mac at $90 million.

Applying the same analysis to a broader universe of banks, financial firms, insurers, mortgage brokers and others who DeBoskey identifies as the companies likely to benefit from the proposed bailout and the total executive pay comes to $27 billion.

“I’m not surprised by too much in life when it comes to corporate America,” says DeBoskey, who was a corporate controller and CFO for many years before returning to school to earn his doctorate. DeBoskey’s last role was comptroller of mortgageIT.com, a public company bought by Deutsche Bank in 2004.

But even though DeBoskey describes himself as a “cynic” when it comes to moves to limit executive pay, he sees this as an inflection point. Moving forward boards of directors will have to find some better way to link executive pay to actual results, he says. “If the middle class is going to pay for this bailout through tax dollars, what they’re reimbursing these companies for is all this excess compensation. In my minds eye this is a classic redistribution of wealth from middle class tax payer to the rich who have received all this excess compensation,” he says.

Part of the current debate in Washington centers around limiting the executive compensation tax deduction. But DeBoskey is skeptical that will do much. The deduction is already limited to $1 million of compensation, but that hasn’t stopped the average S&P 500 CEO from making $10.5 million last year, 344 times the pay of a typical American worker according to a recent study by the Institute for Policy Studies.

To those who dream of getting some of these billions back, DeBoskey gives little encouragement. Attempts to do that on the pay of long time New York Stock Exchange chief Richard Grasso failed. But that doesn’t mean future contracts might not write some form of give-backs into compensation. “A prospective and logical approach,” says DeBoskey, “would be to build in triggers and traunches of pay over time that are tied to performance. The payout of the cash occurs ex-post these events, they occur over some reasonable time period.”

$2 billion in five years to 57 individuals ought to give that cause some momentum. It certainly gives a whole new meaning to the concept of the price of failure.

Reader Comments

Gaylord

September 25, 2008 2:52 PM

Fraud instilling Fraud. These are the
same guys that have many debts that we dont even know of, eg. deravatives,
like J.P. Morgan. If you think the
700 is going to do anything, think
again, go look at the Monthly Mortgage
Rate Resets for next year !! Its worse !! Another Band Aid like the
stimulus package. Scandal on Steriods..
The taxpayers bailing them out, then we should get stock of Goldman Sachs and Morgan Stanley........................

Komendador

September 25, 2008 3:05 PM

Nice!

PNW Trojan

September 25, 2008 3:15 PM

GREAT info...now, for the Prof's 2nd Act; what were the tax rates the thieves actually paid? Congress allowed these lobbyists to write in 15% capital gains on much of it....NO way did these racketeers pay 35-38%. See, teach your children that when you BELONG to either Party, and make generous campaign contributions, you get sweetheart deals, pay little in taxes, and GET OUT OF JAIL...FREE!

Tina

September 25, 2008 3:21 PM

American already changed internally to a rich socialism country under the cover of so-called democracy and freedom. Rich people win their power by money, powerful people gain money by helping the rich. Middle class is always the one paying the bill. The poor ones at least can take some advantage of the welfare.
Who do we trust to rescue us? This does not happen in a day. Like said in the article, the one who came out with the bailout plan was actually in the same class of those who drove us to hell today. We need a totally independent investigation system, to disclose all the compiracy and to ASK those who were responsible for today's disaster to PAY BACK. Not just simplely make a rule for future, but also truly PUNISH the wrong. If there is no serious punishment, they will look for next hole in the system to break it.

wonderful

September 25, 2008 3:31 PM

Is it wonderful?

Tom

September 25, 2008 3:58 PM

These guys are modern day carpetbaggers. Not only should they lose their sweetheart pay packages, they should also be put behind bars.

Ramesh Patel

September 25, 2008 4:02 PM

Instead of bailing out AIG and other companies, congress should investigate for possible fraud withing company and tax fraud. CEO's and other executives are thieves. Investigate all those people. COngress will not investigate those people because of campaign donation by these thieves. Government prints money and withdraw money from social security system. Most of the represantative we have in congress are sales man and very bad dirty politicians. They are supposed to be law maker instead they are breaking law. Most politicians has off shore accounts. Investigate all politicians and then go after these CEO and other executives of the company who steals billions from the company. Wake up America. People in Amecica should wake up. If we wake up then dirty politicians can not do any dirty politics.

brian

September 25, 2008 4:03 PM

we have no democracy, if you think we do your either a fool ,an idiot or both. If this fails..and it most likely will...God help us...for Americans will not stand for this , blood will flow on wall street.

Henry

September 25, 2008 4:11 PM

THE FIX IS IN! AP story: "The bipartisan consensus on the general direction of the legislation was reported just hours before President Bush was to host presidential contenders Barack Obama and John McCain and congressional leaders at the White House for discussions on how to clear obstacles to the unpopular rescue plan." If there was ever any doubt that the Congress and our two major political parties are owned lock, stock and barrel by Wall Street, there is no doubt now. Welcome the United States of Fascisim. Heil Bush! Heil Bernanke! Heil Paulson!

Henry

September 25, 2008 4:31 PM

fascisim: A philosophy or system of government that advocates or exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with and ideology of belligerent nationalism. - The American Heritage Dictionary. Hmmm...that would seem to fit. Mussolini would be proud.

Sarah

September 25, 2008 4:51 PM

Every firm that receives bailout assistance should have to repay the treasury every cent with interest, even if it takes all their profits for the next 20 years. Every executive who received golden parachute compensation should have to repay evey cent received or have their assets seized by the Federal Government. This must never be allowed to happen again.

Charles

September 25, 2008 5:22 PM

The CEO have managed to paint themselves into a "Golden Corner". Losing money for stockholders was too difficult for them. They now have a direct line to the government. Welfare for Wall Street!

Mark

September 25, 2008 5:23 PM

And every debtor who took out a mortgage he or she couldn't repay based on anything OTHER THAN market appreciation should also be forced to repay the treasury every cent with interest, even if it takes the next 20 years. If there were no bad debts - no mortgages that shouldn't have been granted in the first place - then there'd be no need for a Wall Street bailout. And let's remember that it wasn't Wall Street that made these bad mortages, either.

Gosh, is this option not as popular as blaming those "greedy" "fat cats" on Wall Street? I wonder why. . .

wolfkopf123

September 25, 2008 5:38 PM

... tying compensation to performance
is a carote and stick mentalitaet.. Didn't we just have all those mortages going sauer because of the socaled performance enhanced compensation packages for real estate Brokers " sell that house at any cost. "the Sales Manager wants to buy a new boat " The Salesman wants to take the kids to Disney World " etc. etc.

AnnieR

September 25, 2008 5:41 PM

As an American middle class worker and as such, part of an endangered species I am sick of hearing guys like Paulson, Bernanke, et al telling us about how this plan is less costly than the alternative. If they had been doing their jobs instead of lining their pockets we wouldn't need a plan to bail out the greedy and stupid. These guys should be in jail, not running our country. If I hear one more politician ramble on about how hard working the American people are I'm gonna puke! What difference does it make how hard we work if the companies who employ us send our jobs overseas? Meanwhile, the CEO's and other bigshots are making 344 times what we do keep making more for continuing the outsourcing to whatever country they can take advantage of for cheap labor. Don't insult our intelligience any more. Vote out all the incumbents who have sat by and watched this meltdown while lining their own pockets. This house and congress has done little or nothing for their constituency, only for themselves by voting raises and healthcare benefits for themselves. So Mr CEO, when you are looking for cheap labor in a third world country, look no further than Main Street because that is what we have become.

Chad

September 25, 2008 5:44 PM

It is sickening to me to know that some of these executives are going to walk away millionaires. They should be stripped of everything down to the last penny and thrown in jail. If they are so good at what they do and deserve that money then when they get out they can re-build thier millions. If i don;t pay my mortgage I lose my house and have to start over. Unfortunatly the problem is the middle class is so busy working to keep up with the ridiculous cost of living in this country that we spend all of our extra time working to pay the bills and don't have time to do anything about this. It will get passed and we will foot the bill and nothing will change. They have us right where they want us.

Henry

September 25, 2008 5:45 PM

The bailout will become known on Wall Street as The Great Duck Dinner (with the American people playing the role of the duck, of course). I wonder what they have planned for a dessert?

PacificGatePost

September 25, 2008 5:47 PM

WHO SHOULD OVERSEE THE FIX and WHO SHOULD BE HEADING TO JAIL?

Too many have fed at the trough. What Fannie Mae and Freddie Mac executives did was illegal.

http://pacificgatepost.blogspot.com/2008/09/fanny-mae-freddie-mac-congressional.html

Still no time to panic, but some executives and some in Congress should see jail time.

Henry

September 25, 2008 5:57 PM

Help, police! Help! I'm about to be mugged by Wall Street, the FED and my government. What? Oh, yea, I forgot. The cops are only there to arrest common criminals - not the umcommon ones.

Edward

September 25, 2008 5:57 PM

Instead of putting us farther in debt bailing out everyone at the TAXPAYERS expense, legalize Marijuana.. Seriously look at the numbers... 200 BILLION dollar a year cash crop we dont use, and YOUR government is against using.
Sounds like the government and Americans need to start waking up......... Kinda makes you wonder about your FREEDOMS or LACK THERE OF.... Stop Ignoring it. Marijuana which so many people think is the root of all evil could very well be the thing to help save the economy from another depression...

Redburn

September 25, 2008 6:12 PM

Put them all in jail and get them out to fix this mess on work release during the day and back to jail at night.

Get angry

September 25, 2008 6:29 PM

Email this article to your Senators and Congress reps with a reminder that you will be watching how they act and voting accordingly. Their email address info is easily Googled.

Dwight Nager

September 25, 2008 6:37 PM

The solution is very simple.

A 5 year escrow on all compensation over $300,000 per year.

Shareholder value tanks on your watch, or your successors, you lose it.

Olonzo

September 25, 2008 6:39 PM

Morden day capitalism..... Privatise the profits and socialise the losses....

All Together

September 25, 2008 6:41 PM

T. Boone Pickens was right. . . We're seeing the greatest redistribution of wealth this country has every seen. And we didn't even have to install one new windmill or start new drilling in Alaska!

Robert Lee

September 25, 2008 6:47 PM

I hope that there is some jail time for these criminals that caused all this and there are plenty of so called politicians directly involved in this whole fiasco they need to be identified and jailed also.

CB_Brooklyn

September 25, 2008 6:49 PM

And what about the FBI investigations?


"FBI probing bailout firms - Investigators start search for fraud at Fannie Mae, Freddie Mac, Lehman Brothers and AIG, sources say."
http://money.cnn.com/2008/09/23/news/companies/fbi_finance.ap/index.htm


Bush blocked CNN/FOX's broadcast of the World Court's 3 hour documentary detailing the criminality in the country.
http://fourwinds10.com/siterun_data/nesara/news/news.php?q=1222204807
http://fourwinds10.com/siterun_data/nesara/news/news.php?q=1222269903


Bush's grandfather Prescott conspired to overthrow the Constitution, assassinate FDR, and turn the USA into a Nazi Camp:
http://www.bbc.co.uk/radio4/history/document/document_20070723.shtml

Danny DEE

September 25, 2008 7:00 PM

Rich people need poor people! How would they know they were rich?

If you want to know how this plays out, quit text messaging and read "Parable Of The Water Tank"! It's APT.

The "Trickle Down" philosophy has turn to pissing and, if the bailout goes thru, it will turn to S**T!

Amanda

September 25, 2008 7:13 PM

NYU economics professor Nouriel Roubini said it right [All Things Considered, June 7, 2005], and we all know it...capitalize the gains and socialize the loss. AGAIN wall street executives benefit while taxpayers foot the bill. Paulson is making sure he takes care of his buddies on wall street. After all in four months a new administration will be in place and he becomes history, what would he care? Taxpayers are going to loose anyway, if not by footing the treasury debts via taxes, then by loosing their investments (homes or otherwise). Did it ever occur to you that what the executives earned are tied up in investments? Obviously it is not in their mattress. If the investment companies fail the those executives who were paid 2003-2007 will loose it...Paulson cannot allow that to happen especially since his is also at stake.

Collateral

September 25, 2008 7:52 PM

Comrades Ben, Hank, Chris and the CEO's need to put up some collateral for the money they want to steal from the US Taxpayers. Lets say $100 billion in personal assets (cash, real estate, jewelry, cars, etc.) as collateral for the $700 billion that they want.

Douglas

September 25, 2008 8:04 PM

I'm against the $85,000,000,000.00 bail out of AIG.
Instead, I'm in favor of giving $85,000,000,000 to America in a
"We Deserve It Dividend."
To make the math simple, let's assume there are 200,000,000
bona fide U.S. Citizens 18+. Our population is about 301,000,000 +/-
counting every man, woman and child. So 200,000,000 might be a fair stab
at adults 18 and up. So divide 200 million adults 18+ into $85 billion
that equals $425,000. My plan is to give $425,000 to every person
18+ as a "We Deserve It Dividend."
Of course, it would NOT be tax free. So let's assume a tax rate
of 30%. Every individual 18+ has to pay $127,500 in taxes. That
sends $25,500,000 right back to Uncle Sam. But it means that every
adult 18+ has $297,500 in their pocket. A Husband and wife has $595,000.
What would you do with $297,500 to $595,000 in your family?
Pay off your mortgage - housing crisis solved.
Repay college loans - what a great boost to new grads.
Put away money for college - it'll be there.
Save in a bank - create money to loan to entrepreneurs.
Buy a new car - create jobs.
Invest in the market - capital drives growth.
Pay for your parent's medical insurance - health care improves.
Enable dead beat Dads to come clean - or else.
Remember this is for every adult U S Citizen 18+ including the
folks who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our
Armed Forces. If we're going to re-distribute wealth let's really do
it, instead of trickling out a puny $1000 ( 'vote buy' ) economic
incentive that is being proposed by one of our candidates for President.
If we're going to do an $85 billion bail out, let's bail out every adult
U S citizen 18+!
As for AIG - liquidate it. Sell off its parts. Let American Gen eral g o
back to being American General. Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here's my rationale. We deserve it and AIG doesn't.
Sure it's a crazy idea that can never work. But can you imagine
the coast-to-coast block party! How do you spell economic boom?
I trust my fellow adult Americans to know how to use the $85 billion.
We deserve it dividend more than I do the geniuses at AIG or in
Washington DC.
And remember, The family plan only really costs $59.5 billion
because $25.5 billion is returned instantly in taxes to Uncle Sam.
Ah, I feel so much better getting that off my chest.
Kindest personal regards,
A Creative Guy & Citizen.
PS: Feel free to pass this along to your pals as it's either good
for a laugh or a tear or a very sobering thought on how to best u se
$85 billion!

Central States

September 25, 2008 8:05 PM

We are in a vicious circle of greed and selfishness in the U.S. and we need to find a way to break the cycle.
This is not just a business problem but society wide. How many of us speculated on flipping a house and lost the bet? How many of us buy products made in China or India? What is the effect of these decisions?
These same decisions made by business executives everyday but the game in that environment is much more complicated.
In droves we search and invest in mutual funds with highest returns. These mutual funds want more business and therefore invest in companies that generate the greatest profits and returns. The companies link executive pay to higher stock prices which are related to profits. High profits come from taking risk, reducing per unit labor costs (shipping jobs overseas!) and buying parts or products made in China or India.
Imagine the executive that avoids the high risk strategy and keeps jobs in the US. He is personnally loosing out on a big payday, the stockholders(us!) are unhappy with the results, the company sees reduced investment and the company is left with less capitol to grow or expand the business. In order to compete companies must pursue market demands.

Please don't confuse this with condoning the actions of the stupid and greedy. I will be cheering as loud as anyone if some of them end up behind bars but this will not fix the problem.

We must start realizing the value of products made in our country and by our countymen. A well paid local manufacturing job adds value to our communities. These workers spend their money in the local economy which in turn creates more jobs here. Every factory located in the US generates more supporting factories and more good paying jobs. All of these local employees are consumers that spend their money in local shops. If the consumer accepts that there is value in buying U.S. products then even more jobs are created.

It's all based on valuing your neighbors, seeing the interdependence in our economy and realizing the effect of our choices. If we all save a dollar buying a product from overseas what is the real price? Your friends job? Your job?

shawn

September 25, 2008 8:10 PM

I will not pay anymore taxes.

Pete

September 25, 2008 8:15 PM

Paulson, Bernake and this inept Administration are shysters and are trying to railroad US taxpayers into a nation-destroying give away to their banking cronies with a NEW WORLD ORDER smell. This is treason and these scum are enemies of this country. Americans are on to you and your dangerous scheme. Congressmen voting for this travesty should be voted out of office.

tom

September 25, 2008 8:19 PM

when are we going to wake up these are all crooks they need to be in jail

sam

September 25, 2008 9:11 PM

This is fraud on a global scale. Is it a good idea to defraud the Russians and Chinese?

HW

September 25, 2008 9:18 PM

Time in the pokey? Start with Boy George for treason.

Jim G

September 25, 2008 9:29 PM

The United States of America. Are we so afraid of standing our ground on this one? What are we doing even LISTENING to Bush and Co.?
A fitting end to the worst presidency on record....
DON'T LET THIS HAPPEN!
LORD PUNISH THE GUILTY AND GIVE THE SMALL AND WEAK THE STRENGTH TO OVERCOME!

sam

September 25, 2008 9:50 PM

arrest and send these wall street looters to jail. if a poor man steals a loaf of bread from walmart he will get a jail term. no tax payers money should be used bail out these looters. fire all of them and may be to jail! bring down the compensation of CEOs to earth. all these buddies, including mr. paulson, pretecting each other. these looster outsource all the jobs and replace american workers with H1Bs and L1s and now they want american tax payers money to be rescued (so that they can outsource more jobs) !!!!!!!!!
what a joke!

d

September 25, 2008 9:56 PM

LOL @ Douglas. Simple math eh? It would be $425 for every person. (8.5*10^10)/(2.0*10^8)=$425
I love it when people attempt to dumb down an extremely complicated situation with stupid propositions.

Gary

September 25, 2008 10:16 PM

Douglas -

Nice idea, bad math.

85 billion / 200 million = 425.

That's $425.00 per person. Not $425,000. Nice idea, bad math.

tdm

September 25, 2008 10:27 PM

The revolution is overdue folks. Our forefathers broke away from England for what, a 3% tax. Hmm, overdue seems mildly inappropriate.

George Mason

September 25, 2008 10:30 PM

No ceo needs a bonus for running a corpation into the ground they should have to pay back every penny in there bank account to the taxpayer THE COUNTRY IS RIPE FOR REVOLUTION SO SCREW CONGRESS AND LET THE PEOPLE TAKE BACK OUR COUNTRY AND SHOOT EVERY SOCIALIST S.O.B.IN THE WAY.

Peter Christiansen

September 25, 2008 10:40 PM

I think this article goes right to the hear of the matter. For decades Americans have been told that the most important thing in life was their bank credit rating. Now we find that the very people who have been "rating" us, and managing our savings, have been completely incompentent, irresponsible, disingenuous and have been dipping their greedy hands into the till!

Sean

September 25, 2008 10:59 PM

It is so embarrassing and frustrating to be an American. We have invaded so many countries to help spread our brand of "democracy" which is the one where you can buy off the representatives.

Here we sit, apparently 90% or more of us against this while the Congress and President tell us they are going to do it anyway. We have not had control over this government for a long time, but now it is just so painfully obvious as to leave us all nothing but captives.

THE ONLY WAY OUT OF THIS IS TO COMPLETELY RESEAT THE ENTIRE CONGRESS AND WHITE HOUSE. THE ONLY WAY TO DO THAT IS TO VOTE INDEPENDENT ACROSS THE TICKET. IF THEY DON'T PASS THE BAILOUT BILL, VOTE FOR WHOMEVER YOU WERE GOING TO ANYWAY. IF THEY PASS THE BAILOUT, VOTE OUT EVERY PERSON WHO VOTES FOR IT AND REPLACE THEM WITH AN INDEPENDENT. EVERY LAST ONE OF THEM WILL HAVE TO GO.

YOU HAVE TO UNDERSTAND THAT ALL OF THESE PEOPLE ARE RICH. EVEN ALLEGED CHAMPIONS OF THE COMMON MAN LIKE PELOSI ARE WORTH $30 MILLION. WE HAVE GOT TO GET RICH PEOPLE OUT OF THE CONGRESS BECAUSE THEIR JOB IS TO TAKE ALL THE TAX MONEY AND GIVE IT TO THEIR PEERS. IF YOU HAVE $2 MILLION OR LESS IN ASSETS, THESE PEOPLE ARE A DIRECT THREAT TO YOU AND MUST BE REMOVED.

LET'S ALL VOTE INDEPENDENT ON NOVEMBER 4. IMAGINE HOW PISSED ALL OF THE BANKERS AND WALL STREET FAT CATS AND CEOS WILL BE IF INDEPENDENTS WIN A MAJORITY. I BET THEY WILL CALL FOR ANOTHER BAILOUT TO REIMBURSE THEM FOR THE CAMPAIGN CONTRIBUTIONS THEY LOST.

StopBailouts

September 25, 2008 11:06 PM

Liquidity Crisis? For Whom? How liquid are you? Secure Job? Extra cash flow to spend? Secure retirement? I don't think so... not me. Ever owned stock in a company that went bankrupt? I have. I think the fools that have the 'liquidity crisis' should go belly up - especially all the execs that cashed in all the stock options they received so generously from their beloved companies for doing such wonderful jobs, 'pay for performance'. I also hope that the company execs who were so generously rewarded had ALL of their personal net worth invested in the stock of their own companies, and that that net worth vanishes due to their 'poor performance'. What do we have to lose? We're already in recession, duh. Wonder why? The US is in the toilet, can it possibly get worse? More taxes? duh. I agree w/Douglas above, give us the money. Let the firms on Wall St collapse. Someone will seize the opportunity to acquire assets at good values and hopefully manage them properly. Thank goodness Congress is resisting the 'urgency' claimed by the Pres, the Fed, & the Treasury. I suspect there may be some hidden agendas. We'd all be in a big pile of hurt if Congress had agreed to the '3 page' solution last week. Lastly, how much damage could this crisis do to our foreign relations? Buy a bunch of securities that you don't understand (knowing there is RISK), don't be surprised IF they don't bring in the bucks... As far as Edward's comment, why stop w/marijuana? We all should know that coke is Columbia's cash cow and that poppies are Afganistan's economies - and that the US funds them as well as the oil rich countries. Gee, US farmers can't grow these crops but American citizens can definitely buy them on the black market from other countries. And hey, wasn't Iraqi oil supposed to pay for the current war? I apologize for these comments, I'm just fed up w/the bs. Have a great day.

Praful

September 25, 2008 11:10 PM

Sorry, Boss! I should have been there - Missed making my billions :(. Addtionally, just check how much equity or debt do these buggers own in the companies they want to bailout... Looks like Paulson and co. are trying to bail themselves out much more than the companies they are talking about!

JW

September 25, 2008 11:14 PM

To Douglas,

You need to check your math. $85 Billion dollars divided by 200 Million people is $425.00 each, not $425,000.00 each. Essentially the government already gave that to you in the "economic stimulus package", which obviously did nothing to stimulate the economy. Further, $127,500.00 in taxes from each person times 200 Million people is actually 2.55 x 10 to the 13th power, which is actually 25.5 Trillion dollers in taxes, generated apparently by $85 Billion in dispersed revenue. While this in some ways does sound like the circumstances that we currently find ourselves in, only the government could print this much money for no apparent reason. . . .

NR

September 25, 2008 11:31 PM

Loved Douglas' comments on how to solve the crisis, unfortunately his math is off by 000 - meaning each of us would only get $425 -- Not enough to help. Remember the stimulus package was about $165 billion.

jim demunbrun

September 25, 2008 11:51 PM

we seem to have forgotten greenspan and his easing of credit so people that couldnt afford to buy a house were encouraged to do so with 100% financing. it is my opinon that this is where we got the snowball started. i agree that ceo's were over compensated and still are.

math major

September 26, 2008 12:05 AM

($85 billion) / (200 million Americans over 18) = $425, not $425,000. I could use my $425 like the rest of the country, but $425 is substantially less than $425,000.

DDD

September 26, 2008 12:08 AM

Until the poor and middle class finally revolt by putting some of these scumbags where they belong, (under the dirt) we will have this sort of crap until this country collapses under the weight of it's own petard.

Bill McKenzie

September 26, 2008 2:03 AM

I was just doing some quick calculations on my $15.00 Calculator based on 57 individuals receiving $2.1 Billion over a period of 5 years. That amounts to an average of $36,842,105.26 each. Not bad for 5 years work. Doing further calculations this breaks down to $7,368,421.05 per year. Oh I think I could manage to survive on that if I watched my pennies.
Let’s go a little further, can you imagine having to live on only $614,035.09 a month or $141,700.41 a week. That would make buying groceries a little tenuous at best and I would sure have to cut down on my eating out. Going a little further with this analysis, based on a 40 Hour Week, that amounts to only $3,542.51 per hour. Guess I will have to put off buying a new Hummer until finances get better.
Try telling this story to the teller at WaMu who is coasting along on $12.00 per hour or $480.00 a week. That is $1,920.00 a month before deductions or roughly a little over half of the CEO’s hourly rate. I am sure that he/she will have a lot of sympathy for the boss that is of the brink of financial ruin and will have to go live in Tent City.
Just a few thoughts that I thought I would share. Sure glad that I am 70 and not 20. I’ll survive this mess, but my grandkids are going to end up paying for it.
Papa Bill

ASI

September 26, 2008 11:35 AM

Let get the numbers right:
AIG bailout:
85 billion = 85,000,000,000
If we give the bailout money to 200 million US citizens - their share is:

85,000,000,000 divide by 200,000,000 =

$425 dollar = 4 hundred & 225 dollar.

Just enought to go buy groceries after paying taxes.

Capricorn

September 26, 2008 12:59 PM

The way these guys are running this country is absolutely disgracefully. I hope when election time comes around the voters remember this mess and think very carefully who they are voting for.
Just remember who your senator is for your state. The bottom line is greed, it has been all along. Why should there be a compensation pkg for the 57 individuals when they have already made millions.

BarbR

September 27, 2008 5:22 PM

They should NOT be allowed to keep any of this $. They broke the bank, they should pay not me or any other ordinary citizen. But we will - for years and years - and these greedy sob's will continue to live large

Gerry D

September 28, 2008 12:02 AM

I URGE you to let your reps in congress know that this "bailout" is the worst idea ....EVER! If they vote for it then every american should VOTE THEM OUT. NO MORE "golden Parachutes" for Wall Street. If you make BAD decisions then .....Suffer the consequences. (P.S. $700 Billion would give Every taxpayer in America.....$3500... One heck of a block party)

Andrew

September 28, 2008 2:46 AM

Wall Street is a joke. It really would be hilarious how stupid and incompetent they all are, if their idiocy wasn't about to implode the US and possibly world economy.

If you know an investment banker or see on one the street (where they all belong and will be soon) give him/her a piece of your mind (or preferably a hard kick the arse)

Chagrin

September 28, 2008 4:24 AM

This isn't trickle down anymore. It's a full stream. How about Congress "investing" the Congressional Pension into this if they are so sure this is going to work? That's a laugh. Oh yeah, love the provisions of the Bill giving 350 Billion to Paulson right away and the other 350 Billion can be reviewed by Congress but If Congress said "no" they would need a 2/3 majority to stop it. And the oversite? Probably the same people that just created this Bill behind closed doors. And yes, you guessed it, those same people (3 democrats and 3 republicans) who got more than $20 million in funding from those K street scum. Keep up the good work Congress!!! A few more Bills like this and you'll have an extinction event for the middle class! That would be interesting. The rich would have to turn on each other and devour themselves in their unparrelled greed. One more thought; look up the defination for Kleptocracy. Really fits.

Debby Jo

September 28, 2008 7:55 AM

Someday these corporate greed mongers are going to answer to a higher authority. Since I believe the bible to be the inspired word of God, I know that history will end as we know it, when God will allow evil to reign in this current world. Maybe he is allowing history to prepare us for Doomsday. When that occurs the "first will be last and the last will be first"
I cant wait until I stand in front of the line and look back to see if all the current CEO's and Wall Street moguls are even there in heaven to great Jesus. Seriously, when they look down on all the little people it reminds we of the parable of the rich man and Lazarus in the New Testament. Hey smartie pants CEO's why don't you pick up the good book and read it. You future looks really grim and it's not too late to repent.

Rebecca Meehan

September 28, 2008 9:48 AM

This is surely the most despicable thing that George W. has perpetrated on the citizens of the US in the past 8 yrs. I thought all of the senators were going to vote for no golden parachutes to be given to the frauds and failures who have driven this country into bankruptcy. Oh, wellllll, just more of the same.

tony z

September 28, 2008 2:14 PM

I was just wondering if all of these stock options for bonuses are still going to be issued for past performance? (MOST LIKELY)
I'm also wondering if the ones that were issued are going to be a gold mine for these thieves when the government helps fix their problems and their stock is worth 5 to 10 times more? (MOST LIKELY-PROBABLY MORE THAN THAT) Was this ever counted as their pay. (PROBABLY NOT)
If you think their stated pay was a lot, wait until the stock skyrockets again!!!!
I think they should not let them benefit from the stocks going back up.
They should have a part in the fix also.
If you do not have consequences for your actions (or lack there of), you will NEVER learn.
I AM TOTALLY AGAINST ANY BAILOUT WITHOUT ANY RESTRICTIONS ON EXECUTIVE PAY AND WITHOUT THE TAXPAYERS GETTING A RETURN ON THEIR INVESTMENT. THE PRE-CONDITION SHOULD BE THAT THEY MAKE NOTHING UNTIL THE DEBT (LOAN) IS RE-PAID. THEY WOULD NEVER HELP ANYONE ELSE IF IT WAS THEM THAT HAD TO BAIL SOMEONE OUT WITHOUT MUCH CHANCE OF GETTING A SUBSTANTIAL RETURN.
MOST PEOPLE (OR SMALL BUSINESSES) THAT ARE FAILING WOULD BE LUCKY TO GET A LOAN FROM ANYONE BUT A LOANSHARK AND PAY A MINUMUM OF 35-40% INTEREST ON THAT EMERGENCY MONEY.

THE MOST LIKELY SCENARIO:

MOST BUSINESSES THAT OPERATE LIKE THIS WOULD NOT ONLY LOSE THEIR BUSINESS, BUT THE PEOPLE IN CHARGE WOULD GO TO JAIL.

Bryon

September 28, 2008 2:49 PM

If they make this kind of money for failure what are you going to pay them when they succeed? Let the economy fail and let the gov't buy out the workers.

Godless Perry

September 28, 2008 8:22 PM

You got to love it. The same idiots that voted for Bush, like Debby Jo, are looking to their gods to make things right. We, America, deserve what we get because we are stupid and arrogant.

Jeff Strawberry

September 29, 2008 10:36 AM

First and formost to a previous poster, People on welfare DO NOT want to be there. There's no glamour in being on welfare, it does not compare to how these fat cats are living. And just one other thing, tell me how much you love the "greatest country in world". While you have been business noting our differences, the powers that be have been looting this country.

mia

October 2, 2008 11:41 AM

A casino economy or an economy of fiction where it was thought that only capitalism can produce money. ... Money on its own does not produce more money. It has to go through the circuit of production, work, knowledge, services and goods." -- In other words, with all the low-tech and hi-tech manufacturing being outsourced out of the country, no real wealth is being created. You cannot create real wealth out of shuffling papers and selling stuff to each other.

Sandra

October 3, 2008 9:44 AM

Obama Obama where for art thou? You said you were for Change and when the opportunity arises you fall in step with McCain. You are him in a better suit. What do we do now? How is going along with the B.O. bill helping us change American politics? Let the freedom they enjoyed ring with their losses too. You are helping put a gun to our head and make us give up our money to those who have plenty. Where is your Change Platform? Was this exempt? Good we find out now.

km

October 4, 2008 11:20 PM

I knew I should have invested in Credit Default Swaps instead of oil.

Will Bartlett

October 6, 2008 9:14 PM

S&P, Moody's and Fitch are also at the root of all this. S&P is a McGraw-Hill Company. So is BusinessWeek.

Triple A ratings for worthless CDOs! I am sure these guys will get sued out of business!

Ruben Vasquez

October 8, 2008 10:50 AM

This is the opportunity for congress to created new law to punish this people. I was amaze when i hear on tv this congress woman asking the CEO from AIG that at least give us an apology. After trillions of $ wasted she's asking for apology! I seen cases where regular joe hungry get into a grocery and stole a bread and the judge want to trow the key to the Hudson river this is just ridicules i can bet that if you check the prison around the country you will release the burden of the American tax payer releasing all this people. I'm from south America and a year ago i was saying we were getting into a recession i know about inflating economic because that is what you more see in ours countries and because i'm poor and we feel it more faster many people agree but now they saying that we are in a recession and now i say that this broken economic can bring this country into a depression so fasten your seat bell. MAY GOD BLESS THE UNITED STATE OF AMERICA

interest

October 9, 2008 11:11 AM

How much money a person need and further
greed. These people should have all their items taken because it is a damn
shame so many people suffer because of
their devil ways to destroy the stock
market and investors who rely on retirement to home crisis. They should not get away. There is no way a person
can justify this deliberate greed that
has and is destroying lives. Cooparate
greed should be punished. This is a big
constitutional violation that against
the United States of America. This deliberate cause should not be forgiven. This is mutiny against the people and government.Stop those 10 ceo's.

Penal System

December 25, 2008 6:50 PM

There really needs to be more accountability of execs considering they don't just affect the company but the American economy for larger corporations. The current system obviously doesn't work because there is too much money to be had with deception that there is no near equivalent regulatory division.

Seriously America, stop letting the execs buy their way out and really make them pay.

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How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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