Current Weather
The Spy FM

Lehman Was Set To Pay 50 Execs $700 Million Just A Year Before Collapse

Filed by KOSU News in Business.
April 27, 2012

Lehman Bros., the Wall Street giant, collapsed in September 2008 in the nation’s largest bankruptcy and arguably kicked off a financial meltdown that helped drag the economy into the Great Recession.

Just one year before, it awarded 50 top executives financial packages that would have been worth about $700 million if all had gone well for the firm, according to internal documents obtained by the Los Angeles Times and confirmed by The New York Times.

Three executives together were given packages worth more than $100 million at the time, the documents show.

Because much of the compensation was in the form of stock in Lehman, however, the amounts that the executives actually received were likely far less than the $700 million. The top-paid person in the group, Robert Millard, told the L.A. Times that more than half of his $51.3 million package was in stock, which as the newspaper says “was rendered worthless by the bankruptcy.”

Still, as the N.Y. Times says, “Wall Street critics blame the outsize salaries of bank employees as a core reason for the global financial crisis, arguing that the promise of large pay packages led to excessive risk taking.”

And the L.A. Times adds this:

“Wall Street critics say the rich pay deals show how the short-term trading mentality had taken over the financial industry a few years ago. ” ‘The numbers are shocking but consistent with the fact that in some ways Wall Street has been run as a casino for extracting money from the real economy and using it to pay extraordinary high levels of compensation — one might say obscenely high — to a small number of people,’ said Lisa Donner, executive director of the advocacy group Americans for Financial Reform.”

[Copyright 2012 National Public Radio]

Leave a Reply

5AM to 9AM Morning Edition

Morning Edition

For more than two decades, NPR's Morning Edition has prepared listeners for the day ahead with two hours of up-to-the-minute news, background analysis, commentary, and coverage of arts and sports.

Listen Live Now!

9AM to 10AM The Takeaway

The Takeaway

A fresh alternative in morning news, "The Takeaway" provides a breadth and depth of world, national and regional news coverage that is unprecedented in public media.

View the program guide!

10AM to 11PM On Point

On Point

On Point unites distinct and provocative voices with passionate discussion as it confronts the stories that are at the center of what is important in the world today. Leaving no perspective unchallenged, On Point digs past the surface and into the core of a subject, exposing each of its real world implications.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center