CEOs parachute to safety

As the stock market's rampage has snatched billions from investors' portfolios, the spotlight is on golden parachutes for exiting CEOs of troubled firms. Lehman Brothers' Richard S. Fuld Jr. was hammered in Washington over the hundreds of millions he collected (between $250-million and $480-million since 2000, depending on who's estimating) before its bankruptcy nosedive. Part of his take: $24-million as he walked out the door. On the flip side is AIG ex-chief Robert Willumstad, who took the politically safe route of declining a $22-million parachute when the government took over. Here's a look at some past and potential exit packages (cash, pension, benefits, accelerated stock and options and other compensation).

Jeff Harrington, Times Staff Writer


$161-million: Merrill Lynch, Stanley O'Neal

O'Neal left Merrill in October 2007 in the wake of an $8.4-billion write-down. The bulk of his hefty payout was for accelerated stock and options ($87.3-million) and vested options ($43.5-million) with a $24.7-million pension tacked on.

$56-million: Countrywide Financial, Anthony Mozilo

Under Mozilo, Countrywide became the kingpin of subprime mortgages. Bank of America, which bought Countrywide in June, has agreed to give $9-billion to Countrywide customers to settle predatory lending suits.

$44-million: Washington Mutual, Kerry Killinger

J.P. Morgan Chase acquired Washington Mutual last month after subprime loans drove the Seattle-based bank under. Killinger had left before regulators seized WaMu assets, marking the biggest bank failure in U.S. history.

$24-million: Lehman Brothers, Richard Fuld

Fuld accepted some culpability while blaming the media, short sellers and the government for an "extraordinary run'' on the legendary investment bank. Mark it down as the biggest corporate bankruptcy ever.

$19-million: Washington Mutual, Alan Fishman

Fishman wins the prize for efficiency. On the job for less than three weeks before WaMu's sale to J.P. Morgan Chase, he was eligible for $11.6-million in cash severance and entitled to keep his $7.5-million signing bonus.

$16-million Freddie Mac, Richard Syron

The Federal Housing Finance Agency has indicated Syron may not receive the exit pay spelled out in his employment contract now that Freddie is under federal control. The thinly capitalized lender was placed into conservatorship Sept. 7.

$13-million: Bear Stearns, James "Jimmy'' Cayne

The exit pay was chump change. Cayne reportedly made $161-million before the company collapsed in June and was sold to J.P. Morgan Chase.

$9-million: Merrill Lynch, John Thain

Hold on. Bank of America, which bought Merrill, said Monday that Thain will stay on board with a major role in the combined company. He's on the short list to succeed BofA chief Ken Lewis, who faces mandatory retirement in four years.

$8-million: Fannie Mae, Daniel Mudd

Like Syron, Mudd stands to lose part or all of his exit pay after the government took control. Mudd reportedly disregarded warnings from his managers that lenders were making too many loans that would never be repaid.

Source: James F. Reda & Associates

CEOs parachute to safety 10/08/08 [Last modified: Sunday, October 12, 2008 7:07pm]

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