Say Anything Blog

Actually, I’m not quite sure this means that no bailout was needed.  Rather, it means that the execs were having one last party before filing chapter 11 or 7.  As long as there is money in the bank, the company can spend it pretty much for whatever it wants to do.

And those who might employ these jerks in the future ought to take notice….sorry, I’m always appalled when a company hires someone coming from another company that went bankrupt, especially if it was Chapter 7.  One would think that execs would think “hey, Bob was part of Company X that went chapter 7….think that maybe, just maybe, he might have been part of the problem?”

I bet if boards of directors would impose some discipline on hiring Chapter 11/13/7 executive refugees, we might get a little bit more responsible corporate governance…..

These guys will not need to work after they got done shoveling money into their own pockets. You and I will be paying for what they got.

it’s worth noting that these executives wouldn’t have been able to line their pockets if they weren’t sure that their company was going to be bailed out.

It is also worth noting that most of the aforementioned executives had contracts with the firm detailing what they were to be paid and under what circumstances.  It would be interesting to watch an argument whether or not Congress, or the Secretary of the Treasury, or the Attorney General of the US has the authority to abrogate those contracts.  Former NY Attorney General Elliot Spitzer tried to intervene himself between the NYSE and its former head, Dick Grasso.  Spitzer lost in court… badly.

Its easy to disparage the “executives” of a firm like Lehman Brothers which went down the tubes, but most of their contracts are specific to their own and their department’s performance.  If the head of the M&A department or the head of the Private Accounts and Wealth Management department exceeded the goals set for them by the company, why are they not entitled to whatever paychecks were called for in their respective contracts?

Lumping all Lehman Brothers, or Wall Street executives together and suggesting they are all crooks is no more valid than saying that all Democrats are liars because Joe Biden and Barack Obama have lied repeatedly.

“Capitalism is optimism monetized.”

I had a successful business feeding the porker swines in Washington DC.  The demand outstripped my resources causing me to go under.  Can I get a bailout??

This bailout is just one more example of the indivisible handjob stroking irresponsible CEOs and CFOs with billions so that they can run the American economy even further into the ground. So much for Keynesian economics. If the goal is to stimulate the economy, why not give the money directly to the American taxpayer? A bird in the hand is worth two in the bush administration.

BatOne, good points, but it’s hard for me to imagine a scenario in which executives of a company more or less on the road to Chapter 7 were fulfilling their performance objectives.  If they were, the President and the Board need to figure out why “financially solvent company” isn’t one of those performance objectives.

I’ll grant that it’s legal, and furthermore you’re correct that we try and deal with these things ex post facto at our peril.  I just think that “profitability” and “solvency” ought to be pretty key metrics on any executive’s work goals, and if you go Chapter 7, the board needs to tell you “sorry, but we don’t give performance bonuses when the company goes bankrupt.”

Hopefully future boards of directors for these guys will take a hint and tell them “sorry, but we don’t hire executives from companies that went bankrupt.”

Bike Bubba,

That’s why I chose the specific examples that I did.  Neither M&A nor Private Accounts/Wealth Management would have had any input into what securities were being purchased for the firm’s own accounts or those of its corporate clients.  Similarly, if the commodities trading group booked $1 billion in profits trading oil futures when their goal was $500 million, have they not earned their pay and more?

Clearly, this will all be sorted out in federal bankruptcy court… to the delight and profit of an even more noxious group than Wall Street executives - attorneys!

“Capitalism is optimism monetized.”

You might be surprised; it’s not in the specific job responsibilities, but good executives I’ve seen take keen interest in what their colleagues are doing.  So I don’t know that the walls between those departments are as stark as you would think.  I know they shouldn’t be.