CEOs Paid Big $ After Bankrupting Companies29/05/2012 22:42
Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.
Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy in October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:
About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.
Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 million); the company’s shareholders saw their returns decline 9.5 percent.
And then there’s Citigroup CEO Vikram Pandit, whose pay package was the most disproportionate to his company’s performance, according to a Wall Street Journal analysis:
“CEO pay during 2011 was more firmly correlated to how well companies fared in the stock market,” the Wall Street Journal reported Monday. But that doesn’t seem to be the case on Wall Street, where leading companies into scandals, settlements, and even bankruptcy apparently earns executives millions of dollars.