compensation

Grasso wins! Former NYSE chief can keep money

Jim Kim — Wed, 02 Jul 2008 07:54:47 -0400

Dick Grasso's career seemed to be ending on a very sour note: the State of New York was making him something of a poster boy for his gargantuan pay over the years. In an ugly battle, then-New York Attorney General Eliot Spitzer went after Grasso for the $139.5 million he was paid. Along the way, there were hardly flattering portrayals of Grasso, who came across as embittered. But a judge has dropped the few remaining charges against him. So Grasso gets to keep the money after all, which he vowed to do all along. Andrew Cuomo, Spitzer's successor, said he will not pursue the issue.

For more:
- here's the New York Times article

What to make of Dick Fuld's pay?

Jim Kim — Mon, 23 Jun 2008 21:26:56 -0400

People often point out that compensation boards want top executives to rake in the bucks as long as shareholders do. But what about when the stock tanks? Should they be required to give back some of the stock gains they've pocketed? I really pose this as a rhetorical question, but it is striking to note, as a Fortune columnist does, that Dick Fuld, CEO of Lehman Brothers, has made $489.7 million (before taxes) from selling 14.4 million optioned and restricted shares over the years. For most of that time, investors were profiting as well. Last year, when Lehman stock dropped 16 percent, he still cashed in to the tune of $53 million. So what to make of it? Well, he was given the options and restricted shares legally. He had a right to cash out, but it looks bad. It's definitely a PR issue. The fact that Fuld will not receive his bonus is of little help. What would really help on that front now would be for the top execs to announce a massive purchase of Lehman stock with their own money. That would send the right message.

For more:
- here's the column

Did Blankfein earn his $74 million?

Fri, 02 May 2008 06:59:56 -0400

As part of its package on CEO pay in 2007, Forbes offers up a profile of Goldman Sachs CEO Lloyd Blankfein--the $74 million dollar man. The piece notes that after it became known that Goldman Sachs paid him nearly $315,000 each working day in 2007, shareholders decided to put up a fight. A proposal to give shareholders a voice in exec pay decisions won 43 percent of the vote. How quickly people forget about Goldman's stunning performance last year, when Blankfein pocketed 0.64 percent of Goldman's profits. At Lehman Brothers, CEO Richard Fuld was paid 1.7 percent of profits. At Morgan Stanley, CEO John Mack received 0.55 percent of profits. In all, the board likely was justified. The real test for the compensation committee will be this year, especially if Goldman Sachs stumbles, which is a real possibility.

For more:
- here's the Forbes article