CEO Watch $3 billion shared in between five Wall Street bosses
Between 2003 and 2007, five high profile US fund banks' CEOs (Goldman Sachs' Lloyd Blankfein, Morgan Stanley's John Mack, Lehman Brothers' Richard Fudd, Merrill Lynch's Stanley O'Neal, Bear Stearns' James Cayne) received record breaking pays that are sparking off fierce debate.
The big five houses' bosses - the five US fund banks of which only two, Goldman Sachs and Morgan Stanley are still afloat - shared between themselves no less than $3.1 billion in pays within the five years preceding the Wall Street meltdown, according to a study led by Bloomberg agency.
An amount that needs to be compared with the $1.7 billion that Barclays paid in order to take over Lehman Brothers' US operational infrastructure a fortnight ago, or compared with the $2 billion that JPMorgan paid for the Bear Stearns takeover in March.
Stanley O'Neal, Merrill Lynch CEO (taken over by Bank of America two weeks ago) between 2003 and 2007, received $172 million and his successor John Thain, who arrived in December, took $85 million. A part of this package were stock-options that vanished into thin air when the fund banks' stocks went down at the NYSE.
50% of profits redistributed
The 185,000 employees of these five high profile banks were not forgotten: they received $66 billion (including $39 billion in bonuses) last year alone, that is $353,000 apiece. It represents with more or less 50% of the profits, the highest redistribution ratio in all sectors of the economy taken together.
These astronomical figures emerge in the midst of the efforts made in Washington to pass a $700 billion bailout plan in order to rescue the US bank system, in which was included an amendment limiting banks' CEOs salaries who would call for State aid. For Democrat Senator Chris Dodd, "the authors of this calamity must not walk away with bonuses". Presidential candidates, Barack Obama and John McCain, as well as President Bush, have backed a salary limitation and golden parachutes abolition. At first, hostile to such measures, Henry Paulson at the origin of the bailout plan, finally gave in. "Americans are angry at the excesses. They're angry at executive compensations and they're right" admitted Paulson to CBS News. He personally made $111 million when he was at the head of Goldman Sachs between 2001 and 2006.
The average income of the 500 biggest American companies' top executives reached $10,5 million last year, i.e. 344 times the average national median income. In the 1970's, this ratio was barely reaching 35 times.
