Monday, November 17, 2008

Breaking Contracts

"The concept that these [bank] executives are 'owed' anything at all is beyond credibility. To the extent that the special pensions and deferred compensation for executives was tied to performance over the last five years, they should be wiped out. Let's turn the clock back to 2003. ... How many companies in the U.S. 'restructured' over the last two decades, eliminating pensions, reducing health-care benefits and changing pay scales for employees? ... I would venture that there are more people out there who might characterize Merrill executives as having sunk the company. The attitude of entitlement really bothers me. ... How many trillions of dollars of losses will it take before Wall Street executives figure out that they are on life support (courtesy of taxpayer dollars) and that they are no longer running the show", Karl Loos letter the the WSJ, 5 November 2008.

"Remember what we said about paying off the Barbary pirates: Millions for defense but not one cent for tribute. Let's update: Billions for bailout but not one cent for bonuses", Bruce Rider letter to the WSJ, 5 November 2008.

The executives of companies participating in Henry Paulson's $700 billion bailout who are "due" deferred compensation, should be told: you get nothing. If you don't like it sue. Of course, if you do you might be painting a target on your back since Mike Garcia resigned as SDNY US Attorney and his successor might do the job I think he should. If an executive has the right white-collar criminal defense counsel, he might be told foregoing his deferred compensation can be part of his restitution fund. See my 29 October 2008 post.

Rider is too kind. I say, paraphrasing FDR, "Investigate and investigate, indict and indict and convict and convict".

1 comment:

Anonymous said...

We need some of this spirit for the SDNY US Attorney office to clean up Wall Street...

" T. Roosevelt became president of the board of New York City Police Commissioners in 1895. During his two years in this post, Roosevelt radically reformed the police department. The police force was reputed as one of the most corrupt in America. The NYPD's history division records that Roosevelt was "an iron-willed leader of unimpeachable honesty, (who) brought a reforming zeal to the New York City Police Commission in 1895."

Get that CNC guillotine from GSC.