Lehman's Bonus To High Level Exes Days Before Bankruptcy.
There's a big article today at the Times Online, about Lehman Brothers giving bonuses to high level execs just days before the bailout. I however, blogged about this on October 8th in a posting. Here's the excerpt from the post.
BONUSES GIVEN FOUR DAYS BEFORE FILING BANKRUPTCY
Waxman cited a memo (PDF), among 24 pages of internal emails from Lehman Bros., showing Lehman recommending four days before the bankruptcy filing that three departing executives received more than $20 million in "special payments." On September 11, Lehman planned to approve "special payments" worth $18.2 million for two executives who were terminated involuntarily, and another $5 million for one who was leaving on his own.
"In other words, even as Mr. Fuld was pleading with (US Treasury) Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman stated.
Andrew J. Morton was the head of fixed income who was involuntarily terminated. According to the document, his last day worked was "Week of September 8" with a termination date of "December 1, 2008 (after 12 week notice period, per UK policy)". His "Special Payment" was $2 million, plus one year's base salary of $200,000 as standard severance. Fuld stated this was deemed "appropriate for his years of service." The document states that Morton received $14 million in 2006 compensation, and $12.5 million in 2007 compensation. Morton had worked for Lehman for 15 years.
Benoit Savoret, the chief operating officer for Europe and the Middle east was also involuntarily terminated. According to the document, his last day worked was "Week of September 8" with a terminate date of "December 1, 2008 (after 12 week notice period, per UK policy". His "Special Payment" was $16.2 million. The document states that Savoret received $12 million in 2006 compensation, and $18 million in 2007 compensation. Savoret had worked for Lehman for 11 years.
Jeremy Isaacs, who voluntarily terminated was going to be working through year end until December 2008. His terminate date was listed as March 2009 under the same UK policy. Isaacs "Special Payment" was $5 million "described as a minimum amount in his agreement letter. There was an additional term that stated "Any additional amount may be paid, as determined by year end 2008 at the discretion of the Firm and as approved by the Compensation Committee." His 2006 compensation was $21 million, and 2007 was $22.0 million. Isaacs had worked for Lehman for 12 years.
Within the document, there was a compensation arrangement for Gerald Donini, the Global Head of Equities, to "facilitate his retention with the Firm". He was guaranteed a minimum of $20 million in total compensation for 2008 and 2009.
There was also a compensation arrangement for Eric Felder, the recently appointed Global Co-Head of Fixed Income, that he would receive a 2008 cash advance on his 2009 compensation, in the amount of $8.5 million, leaving him to receive $16.4 million (minimum) in 2009.
Rep. Elijah Cummings (D-MD) said, "I don't know how he sleeps at night."
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