Compensation alert - yet again

Peter Kraus, the head of strategy at Merrill Lynch is leaving the company and in the process will net $25 million in compensation. This resulted due to the takeover of Merrill by Bank of America.

Here is the stunner:
Peter Kraus joined Merrill in September. A month back!

And the McCain camp has issues with redistributing wealth.

Compensation watch

Just about everyone heard about the largest bank failure in US history - Washington Mutual was seized and sold to Chase for small change last night. As is the norm with these things, the ugly head of excessive executive compensation showed up again.

The New York Times reports on the following:

Mr. Alan H. Fishman, CEO of Washington Mutual who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus.

The guy worked for less than three weeks at Washington Mutual… Morally and ethically, something is not right.

Bailout frenzy continues..

The news is that the Bail baby, Bail! team composed of the Federal Reserve and the Treasury are planning on coming up with the god of all bailouts. They plan still being worked out relies on the now familiar tactic of buying up large portions of toxic debt held by the banks using taxpayer money. This is good on several fronts. This way the companies that got to play and profit with exotic financial instruments are saved, the CEO's still get to take home their million dollar bonuses, very little regulation gets passed in the spirit of 'market knows best, stupid' and mainly ensuring that the common individual and taxpayer keeps getting screwed again and again.



John Updike, "Superman"


I drive my car to supermarket
The way I take is superhigh
A superlot is where I park it
And Super Suds are what I buy.
Supersalesmen sell me tonic
Super-Tone O, for relief.
The planes I ride are supersonic.
In trains I like the Super Chief.
Supercilious men and women
Call me superficial, me!
Who so superbly learned to swim in
Supercolossality.
Superphosphate-fed foods feed me
Superservice keeps me new.
Who would dare to supercede me
Super-super-superwho?


---From the New Yorker, November 12, 1955, p. 56

Oh, I forgot to mention the cost: The ranking Republican on the Banking Committee, Sen. Richard Shelby, said the U.S. has "been lurching from one crisis to another" and predicted the new bailout plan would cost at least a trillion dollars.

I wonder if Richard Shelby did one of those Dr. Evil type little finger in the corner of mouth routine as he reeled off these numbers...

Executive paycheck watch - II

As the investors keeps getting hammered with more bad news (AIG falling under after ratings cut last night, Goldman announced a couple of minutes back that their profits were down 70%, the first time since the company went public, Merrill to see large layoffs, thousands of Lehman workers out on the street), here is a bit of news that looks to the bright side of things...

From here: Merrill Lynch & Co. Chief Executive Officer John Thain and trading-division head Thomas Montag may reap payouts totaling more than $47 million if they leave or are given lesser roles after Bank of America Corp. buys the firm.

The ultimate irony with the whole payout was that John Thain was hired into Merrill nine months back explicitly to turn the ailing company around. Instead, he turns tables and sells the company lock stock to Bank of America (of course, he had no other option after the debacle at Lehman). Yes, greed is good.

The executive paychecks for CEOs who were responsible for sending Fannie Mae and Freddie Mac into the ground covered here previously.