The Mortgage Mess: Should we be mad about big paydays for CEOs who fail — or big paydays period?

[marmar]

from Too Much: A Commentary on Excess and Inequality:



CEOs and the Mortgage Mess
Should Americans be angry about big paydays for CEOs who fail — or big paydays period? We look at a congressional hearing that created a perfect opportunity to pose this most basic of questions.
March 10, 2008

By Sam Pizzigati

Home foreclosures in the United States, the Mortgage Bankers Association reported last Thursday, are now running at an all-time record high. America’s homeowners, the Federal Reserve Board noted the same day, ended 2007 with more debt on their homes than equity in them — the first time that has ever happened since the Fed started tracking debt and equity data back in 1945.

Meanwhile, also last week, the IRS revealed that the average annual income of the 400 richest American taxpayers has catapulted from $46.8 million in 1992 to $213.9 million in 2005.

Could these phenomena — hard times for average American homeowners and blissfully lucrative times for America’s mega rich — all somehow be related? Last Friday, a congressional hearing created the perfect opportunity to pose that intriguing question.

The hearing — called by the House Oversight and Government Reform Committee — brought to Capitol Hill three CEOs from companies neck-deep in America’s mortgage muck. At the height of the subprime mortgage-fueled housing boom, all three took home annual incomes that placed them right near the tippy top of America’s top 400 income-earners.

At Citigroup, the nation’s biggest bank, CEO Charles Prince pocketed $110 million before before vacating his executive suite last year. He left with an exit package worth another $68 million. At Merrill Lynch, CEO E. Stanley O’Neal also stepped down last year. He carted away $161 million. At Countrywide Financial, chief executive Angelo Mozilo cleared $120 million in 2007 on stock cash-outs alone.

These three CEOs share something else in common — besides prodigious paychecks. All three have led their companies into financial chaos. Citigroup, Merrill Lynch, and Countrywide, over the second half of last year, together racked up $20 billion in mortgage-related losses. .....(more)

The complete piece is at: http://www.cipa-apex.org/toomuch/articlenew2008/mar10a.html

[bryant69]

1. I think it's a little from column b but more from column a

Look, I'm a capitalist. If a CEO has a plan, makes money through honest means, well he should be compensated for that. What bugs me is CEOs who seem to change little or ones who outright fail, and yet still are rewarded beyond the dreams of aravice.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[boobooday]

2. Yes and yes

The salaries and perks are out of control, and then add the golden parachutes for utter failure and you have a system that is completely corrupt.

I would also add that this model poisons a lot of other institutions in this country, in which some principals argue for salaries "commiserate" with the business world.

[stellanoir]

3. both

Something is terribly wrong when CEO's make more on a Monday by their first coffee break than their employees make all year.

We're all taking a fall and scarcely few are awarded golden parachutes.

It's pathetic really.

[nashville_brook]

4. it's piracy -- there's an inherent conflict when a CEO would drain a corp with such inflated salary

how can it be said that they have the company's best interests at heart when they are sucking it dry?

[ProfessorGAC]

5. The Answer Is Yes

But, it should be more outrageous to be paid those sums of money for failing.
The Professor