Everyone knows that senior execs at Bear Stearns and Lehman Brothers were paid largely in stock, and that they lost most of their wealth when the companies collapsed, right?
Turns out, not so much:
“Three professors at Harvard are disputing that logic in a new study, saying it is an urban myth that executives at Bear and Lehman were wiped out along with their companies.
Though the chiefs at both investment banks lost more than $900 million in their stock holdings, the professors argue that it is important to also consider all the riches the bankers took off the table in the years preceding the crisis.
At Lehman, the top five executives received cash bonuses and proceeds from stock sales totaling $1 billion between 2000 and 2008, and at Bear, the top five received more than $1.4 billion, according to the study, which was released on Sunday night on the Web site of the Program on Corporate Governance at Harvard Law School.
The payouts came in the form of cash bonuses as well as thousands of shares of stock that the executives sold as the share prices of their companies soared. Most of the executives sold far more shares during that period than the number they held when their companies hit bottom.”
Another myth of the Bailout era dies . . .
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Source: Executives Kept Wealth as Firms Failed, Study Says LOUISE STORY NYT, November 22, 2009 http://www.nytimes.com/2009/11/23/business/23pay.html
Well, at least some others now know what the rest of us have known.
He might also like to now tell us about the early investors of Bernie Madoff who got triple digit returns over 15 years but who now claim they are wiped out.
The truth will out. But it sure fights like hell to reveal itself.
How is this at all surprising? These folks are merely catching up to what was widely known here and at other blogs in the blogosphere. It’s called legalized “stealing”.
That’s good to know. I will rest much better tonight knowing that these banksters are not sleeping on the street. Instead, hundreds of average Americans have been voluteered to take their place. That’s justice here in the good ‘ole USA.
Wow, this may be the most bogus chart I’ve seen recently. How can you make a point about what these people lost, when it shows the current value of Jimmy Cayne’s share without any indication of what it was previously worth?
At its peak in January 2007, Jimmy Cayne’s 7.03M shares in Bear Stearns were worth $1.2 billion (see p. 315 of Cohan’s excellent book). If he sold$289M, by my count he lost three times more than he sold. Cohan makes clear that many of Bear’s senior execs were in a similar situation, as they (stupidly, as it turns out) kept large chunks of their net worth in Bear stock. I don’t know about Lehman.
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BR: It references how much they sold and cashed out.
If you are looking for empathy cause Cayne “only” cashed out ~$300 million as he destroyed the company, I doubt you are going to get any around here . . .
When you get out of school, you will understand what $300 million means in the real world …
Just as I thought.
Also wasn’t there a report out today saying that GS’ pledge to invest $500 mil in small businesses is nothing but a sham? The report said that GS gets something like 70% tax break on that $500 mil, so it’s not even 250 mil. Sorry, I can’t find the link.
I guess you have to have a heart to do a charity……
The banks have been unbelievable during this downturn. They have basically pinned the world down without any way to get out. I wrote a little article about the “scary banks” in Why don’t more people get upset about this all is beyond me.
This vampire capitalism gig is a real gag. But where will it lead. I mean we kind of know where it has led the question is can it run any further? Surely the pool of greater fools with money to invest in companies run by emfanged ones is running out. Or perhaps it doesn’t matter because the government has taken up where the fools left off.
I’ll bet you the Investment Banks are behind getting Jamie Dimon to take Geithner’s place. They are worried that Geithner is too weak and they need a heavy weight to protect their interests. I cannot see any other reason for Dimon to even let his name be considered.
So if this happens it will be to prevent the breakup of TBTF banks.
It’s nice to see the truth we should have all known become more apparent to more people.
Now, the question becomes “Now what?”.
How much of this has to be thrown in our leaders’ faces before they act on BananAmerica’s mood?
And in a real way. Not in a phony turd-polishing way.
Geithner Is Stalking Horse for Rage at Wall Street: Albert Hunt
"Marie Antoinette would be embarrassed by these guys,"
http://www.bloomberg.com/apps/news?pid=20601070&sid=anqEJS65F3Wg
I’ve said it before and I’ll say it again, disgorgement.
It's bad enough that this happened once. What is much worse is that, even with the benefit of hindsight, Obama will probably not support a bill that includes a "clawback" provision for executives of bailed-out companies. If we're going to have a President who's a socialist, at least he could do something useful.
as others have noted, ~”How is this, even, News?” ~~ on other facets “Just when you thought that the dust had settled from the scandals of Wall Street (at least temporarily), details come out of another Ponzi scheme by the titans of banking, this time with student loans. According to recently released court documents, Citigroup, JP Morgan and the education finance company Nelnet are being sued by the federal government for fraud of nearly $280 million from their participation in the Department of Education's Federal Family Education Loan program (FFEL). FFEL provides billions in annual bank subsidies to private lenders for making student loans "“the same subsidies that the student aid bill currently in Congress looks to abolish.
According to court filings:
"Nelnet, JP Morgan Chase and Citigroup caused false certifications, records or other statements to be made and used to get false claims paid and approved."
"Nelnet's fraudulent course of conduct consisting of brazenly offering inducements to its employees and schools for loan applicants while keeping the DOEd in the dark by virtue of its implied and express certifications of compliance." http://www.ourfuture.org/blog-entry/2009104319/big-bank-fraud-time-student-loans
When Dick Thornburg was talking about ‘Crime in the Suites’ being a bigger problem than ‘Crime in the Streets’, maybe we should have paid attention..
a government of the people, by the people and for the people
could rectify this travesty in short order
with legislation and enforcement
designed to capture taxes levied against “windfall profits”
ie proceeds emanating from bailouts and flow thrus
@ mock turtle: That would only happen if we had a working democracy instead of the oligopoly we’re stuck with. We vote for change and get more of the same. What’s the use in paying taxes, when “our” government no longer responds to the needs of “we the people” and in fact spends “our” money propping up insolvent banks and extends wars we voted to end? Now the value of our homes, our pensions and even our currency is being debased so that for many of us there will be no “retirement” (except death), while the fraudsters and sharks continue living “the good life”. The American dream has become a nightmare.
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