THE Lehman Brothers board signed off on more than $100m (£59m) in payouts to five top executives just three days before the bank went bankrupt leaving thousands of employees out of work in London.

The payoffs, approved on September 12 by the Wall Street giant’s compensation committee, included over $24m in severance packages to the collapsed firm’s top three London executives.

The committee agreed a $16.2m pay-off for Benoit Savoret, chief operating officer for Europe. This payment had been guaranteed by the firm after Savoret had turned down an approach to join a rival firm. Andy Morton, the fixed-income business head, was set for a $2m golden goodbye.

Both were forced out in a shake-up orchestrated from New York in the waning days at the troubled bank. A $5m package for Jeremy Isaacs, the European chief executive who also left, was approved as well.

The executives never received the payments – detailed in internal Lehman documents seen by The Sunday Times - because the company filed for bankruptcy protection the next working day, September 15.

According to Tony Lomas, the lead administrator, they will now be treated as unsecured creditors.

The committee also signed a $41m retention package for Eric Felder, the head of global fixed income in New York, and a $40m two-year deal for Jerry Donini, the US-based head of equities. These are understood to have been voided, replaced by new contracts under Barclays which bought the US business.

The pay deals will further inflame the debate raging about executive pay as the global financial crisis accelerates.

In the two years prior to Lehman’s collapse, the executives were generously remunerated while overseeing forays into risky commercial real-estate investments that helped to bring the company down.

Savoret was paid $30m between 2006 and 2007, Morton pocketed $26.5m and Isaacs received $43m. Morton said yesterday at his home in west London that none of the three men would get the money.

“The bank did recommend that we should be given that money but because the bank went bankrupt the compensation committee never met to authorise it,” he said. “I have no legal redress.”

Savoret, who bought Tony Blair’s house when he went to Downing Street in 1997 and now lives in a £6.6m house, refused to comment.

As the bank careered toward failure, the subject of pay did come up internally. In an e-mail, US executive Judith Vale urged colleagues to rein back on their lavish rewards.

“Top management should forgo bonuses this year,” read the e-mail, dated June 3.

“This would serve a dual purpose. Firstly, it would represent a significant expense reduction. Secondly, when the ‘world’ discovers this in next year’s proxy, it would send a strong message to both employees and investors that management is not shirking accountability for recent performance.”

Dick Fuld, Lehman’s combative chief executive known as “the Gorilla” who has shouldered much of the blame for the company’s collapse, responded to a colleague in a separate e-mail.

“Don’t worry – they are only people who think about their own pockets.”

Failing Lehman in $100m payout plan - Times Online

Welcome to modern capitalism, where the men who lead the actions that burned your company to the ground get to rape the coffers before they go home...

And I say that not to knock "capitalism" in general, but rather the specifics of how some grotesquely abuse their position.
There are plenty of other examples of ex-CEOs who "got away with it"...


This ties back in to how the AVERAGE family's income has gone DOWN during Bush's presidency, while the RICH GOT RICHER...
Whereas under Clinton, the average family's income WENT UP, and the rich STILL got richer...

Gee. Amazing how it can work where EVERYBODY gains instead of just the rich with favored tax cuts...

__________________
"When I give food to the poor, they call me a saint.
When I ask why the poor have no food, they call me a Communist."
--Dom Hélder Pessoa Câmara

We must acknowledge, once and for all, that the purpose of diplomacy is to prolong a crisis.
--Spock, Star Trek

It's more the blame of the boards that GIVE IT to them...

Since when would any decent capitalist NOT try to get as much out of the system (even if it's about to crash)?...

How many people sent back those $600 checks the government threw at them last year?...I doubt many...

__________________
"You get the respect that you give" - cnredd

Some didn't get a dime. If you were overburdened by medical bills and went into default over govt loan-guess what? You're still Johnny '08 Ball.

__________________

While I agree, it should also be noted that it's essentially an industry standard.
Layoff the average employee? Little to nothing for compensation.
Layoff the CEO? Look at that multi-million dollar golden parachute deploy...


When you say "capitalist" like that, it just reads like "greedy bastard" to me.

Sometimes I'm amused at how religion ties into "capitalism", and then seems absent from it...
Sometimes, religious people support "capitalism" tooth and nail like Christ had said "Socialism is the root of all evil".

But instead, the bible teaches "Love of money is the root of all evil".
Jesus talked about how it was it was tougher for a rich man to enter heaven than for a camel to go through the eye of a needle.

"decent" isn't a word I would apply to those CEO's actions, even in a sarcastic manner.

If we talk about this in the context of welfare recipients who don't get a job or do nothing but crank out babies, are they "decent capitalists", or should I change the second word to something else?
Is it okay for the rich CEOs to walk away with money they didn't earn and don't deserve, while the welfare recipient is more condemnable?


The express purpose of those was to "stimulate the economy".
It was an attempt to help REMEDY an economic problem.
Akin to bringing water to a fire, albeit benefiting those who are "helping".

When we're talking about the Lehman CEOs, we're talking about the people RESPONSIBLE for the fire, taking items out of the house that is on fire so they can have them at home...

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As an addendum, if I totally mistook the meaning of the post and missed some sarcasm, please rap me on the knuckles, correct my bone-headed interpretation, and I'll slink on my way...

__________________
"When I give food to the poor, they call me a saint.
When I ask why the poor have no food, they call me a Communist."
--Dom Hélder Pessoa Câmara

We must acknowledge, once and for all, that the purpose of diplomacy is to prolong a crisis.
--Spock, Star Trek