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Payout in Lehmann Brothers Prior to Bankruptcy Filing!

Browsing the net, I found this article:

Apparently, top executives in Lehmann Brothers had payouts close to $100 million prior to filing for bankruptcy!

Are there any fellow Frihosters here who believe that these guys who are managers of wealth rather than the actual creators get paid more than what they deserve, even in the course of their dismal performances?
Yes I think that executive pay is outragous and bankrupts the companies, no doubt about that! It was good to read that they weren't gonna get the money since Lehman Bothers filed for bankruptcy 3 days later. I gathered from the article that they weren't gonna get their severance payouts but they didn't seem too clear about if they got the 100 million or not.

I think that the executives should be treated exactly the way the employees are, you screw up your out the door. Pretty standard severence package in the US is 2 weeks pay for every year of service. So whatever the exec makes on base salary NOT including stock options or preformance insentives, should be their severance, sounds fair to me, and if they make big bucks it is only if the company does well, this paying them huge amounts for poor decisions and failing deals, is BS. If I preformed in that sort of manner in my job they would send me right out the door. Same goes for execs. they screw up they are gone, bring in the next guy!!

In short after my rambling is that I agree, they are over paid morons! Cool
Most discussions about CEO pay focus on either the dollar amount or the ratio of CEO Pay to average
pay. These may be relevant numbers but are hard for the average worker to relate to.
A good and graphic way to evaluate and judge the CEO pay is to:

For a specific PREVIOUS corporate fiscal year,

1. determine the salary paid to the CEO
2. determine the net cost of any benefits
company limo
corporate extras( attending seminar in Bermuda in winter)
health care extras
Add 1 to 2.
This is the total cost(excluding buyouts and other "parachute clauses"
Do this calculation for all top level company officers.
Add them all up.
Call this the total previous year EXECUTIVE compensation.

3. determine the total corporate payroll costs for all employess, including CEO and company officers
for the previous fiscal year.
4. determine the total cost of benefits for all employees
Add them all up
Call this the total COMPANY compensation.

5. calculate the ratio of the total EXECUTIVE compensation to the total COMPANY compensation.
Show the results in a PIE chart, and also a BAR graph
6. calculate the ratio of the total EXECUTIVE compensation to the the gross sales revenue.
Show the results in a PIE chart, and also a BAR graph
7. calculate the ratio of the total EXECUTIVE compensation to the PREVIOUS years profits.
Show the results in a PIE chart, and also a BAR graph

I believe that if these figures were calculated for the Fortune 100 and the current
Bailout candidates, all company stakeholders(employees, stock owners, etc.)
would be shocked.

Not to kill or belabor the point, but a few more comments about CEO pay are in order:

The GM executives are claiming that the cost of employee health care adds anywhere from
$ 1000 to $ 3000 to the cost of a car. A better question is how much does the cost of CEO compensation add to the price of a car?

Some economists are in love with CEO pay.
If a CEO runs a company into the ground, then paying the CEO Ten Million Dollars is
a bargain, to get rid of the CEO.
If the company is doing OK, then paying a CEO Ten Million Dollars is a bargain because
the CEO may have saved the company 100 Million Dollars.
So, a CEO can never lose.

Most Economics text books talk about economic ratios, such as Profit to Sales.
I should think that anyone either planning to buy stock in a company or work for
a company should be aware of the ratios that I mentioned in steps 5,6,7.
The ratios should be presented using both PIE charts and BAR graphs.
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