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Only in America - CEOs take risks that demolish shareholders then walk away with enough cash to never have to work again
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 341 days ago (usatoday.com). Views: 565
Tags: wall street |
| Related Tags: finance stocks economics business video forbes bailout housing bubble |
• At Citigroup (C), CEO Charles Prince was forced out in November, but on his way out the door, the board gave him a bonus of $10 million. He was also allowed to keep $28 million worth of unvested restricted stock and options, and was granted $1.5 million in annual perks.
• At Merrill Lynch (MER), CEO E. Stanley O'Neal resigned in October. Although he didn't receive any special bonus or severance, he walked away with a $161 million package, consisting mostly of stock and options that he had earned through the course of his career at Merrill.
• KB Home (KBH) had an abysmal year, losing $929 million. The company's stock dropped from $53 last February to the high teens by November. But CEO Jeffrey Mezger was awarded a $6 million cash bonus for 2007, in addition to his $1 million salary. In explaining the bonus, the board of KB Home said Mezger exceeded the objectives set for him, which included strengthening the company's balance sheet and rebuilding the senior management team.
• At Washington Mutual (WM), a leading mortgage provider that went from a $3.6 billion profit two years ago to a $67 million loss last year. CEO Kerry Killingerwas paid $18.1 million in 2006 and $14.4 million in 2007. It was a lot worse for investors, who saw WaMu's stock drop from $46 in early January to below $14 at the end of the year.
"It's outrageous for CEOs to take risks that hurt shareholders and walk away with enough to never have to work again," says Robert Mittelstaedt, dean of the W.P. Carey School of Business at Arizona State University.
"It's only in the wacky world of CEOs where you get severance for failing," adds Nell Minow, editor at The Corporate Library, a governance research firm.
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ian said |
| 1 year 341 days ago |
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