In this Oct. 6, 2008 file photo, Lehman Brothers Holdings Inc. Chief Executive Richard Fuld, front center, is heckled by protesters as he leaves Capitol Hill in Washington after testifying before a House committee on his company’s collapse. A new study says he was among the country’s best-paid CEOs for eight straight years — until Lehman disintegrated. (Susan Walsh / Associated Press)
On August 29, 2013, Walter Hamilton writes in the Los Angeles Times:
Nearly 40% of the nation’s best-paid CEOs over the past two decades were either fired, forced to take government bailouts or in charge of companies that paid huge amounts in fraud-related claims.
That’s the conclusion of a report Wednesday that attempts to gauge the link between weak corporate performance and skyrocketing executive pay.
The study, “Executive Excess 2013: Bailed Out, Booted, Busted,” was issued by the liberal Institute for Policy Studies in Washington. It’s the latest in a years-long line of reports by the IPS and other groups charting alleged abuses in executive pay.
Among other factoids, it cites an AFL-CIO study showing that the pay gap between corporate chieftains and regular workers ballooned to 354-to-1 last year from 195-to-1 in 1993.
“Our analysis reveals widespread poor performance within America’s elite CEO circles,” the report says. “Chief executives performing poorly — and blatantly so — have consistently populated the ranks of our nation’s top-paid CEOs over the last two decades.”
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According to the study, 22% of the highest-paid CEOs ran companies that either had to take government bailouts to survive during the 2008 global financial crisis or that collapsed altogether.
For example, Richard Fuld, the former head of Lehman Brothers Holdings Inc., was among the 25 highest-paid chieftains for eight years in a row — until his company disintegrated.
An additional 8% of CEOs headed companies that paid whopping fraud-related fines or legal settlements. In some cases, the executives themselves had to pay penalties for their own inappropriate behavior, such as the backdating of stock options to goose their compensation, according to the study.
And another 8% of CEOs suffered the ultimate ignominy — getting the ax for poor performance, according to the report. Of course, the disgraced executives didn’t give back any of their enormous compensation. In fact, the average deposed CEO walked away with a $48-million golden parachute.
