Ok. So, a good executive can be worth a lot of money to a company. I don’t have anything against a nice pay package, all things considered. But it is literally criminal for an Executive to receive a huge payout when they deliver negative results for a company. In my opinion, Exec pay should be merit based. If the exec delivers outstanding shareholder value, a big paycheck should ensue.
So, how then about these execs? Just 72 hours before the company filed for bankrupcy, Lehman awarded the top 5 executives $100 million. Yep. You heard that right. They drove the company into the ground and got rich off of doing it.
THE Lehman Brothers board signed off on more than $100m (Â£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 giantâ€™s compensation committee, included over $24m in severance packages to the collapsed firmâ€™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 â€“ 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.