Nice Work If You Can Get It
My understanding is that even for the super-elite it normally takes a couple of months to wrack up tens of millions of dollars. But Alan Fishman gets the job done with super speed:
But the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.
One friend suggests “Obama should suspend his campaign to go punch this guy in the kidney.” Indeed.
Part of what you’re seeing as some of this unfolds is that the idea of CEO pay controls specifically tied to the bailout, though good, is also a bit of a joke. A lot of the folks responsible for this mess left their jobs months ago and are current sitting in their multi-million dollar homes, wearing extremely expensive clothing, and laughing at you, me, Obama, McCain and all the rest. Laughing their asses off. You just need to have additional tax brackets for folks up at the millionaire and multi-millionaire level to make sure that the public gets a bigger slice of the pie. If that decreases the incentives for the sort of wild financial shenanigans that brought the country to this point, well, so what?
50 Responses to “Nice Work If You Can Get It”
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September 26th, 2008 at 10:37 am
Re Matthew’s comment “A lot of the folks responsible for this mess left their jobs months ago and are current sitting in their multi-million dollar homes, wearing extremely expensive clothing, and laughing at you, me, Obama, McCain and all the rest. Laughing their asses off. ”
—————-
Er..Actually, one of them is mostly spending his days telling Congress that it needs to take $1.5 Trillion of our tax money and bail out Wall Street.
Although i’m sure Paulson cracks up laughing in the Elevator after scaring the shit out of the Democrats.
I can just see him giving Bennie a high 5 and saying “Did you see Harry Reid’s face? I thought he was going to shit his pants. ha ha ha”
I imagine Paulson’s meetings with Bush are more businesslike. Until a mischievous Cheney smirks at the papers and says “Change You Can Believe In” and the whole table collapses in whoops.
September 26th, 2008 at 10:38 am
That kidney line is great. It had me laughing out loud. Sounds like Attackerman.
September 26th, 2008 at 10:41 am
Sometimes it seems like this entire blog is an elaborate effort to win back Petey’s favor.
When your company gets bought and you lose your job, and you’re the CEO, yes, you get a severance. It can’t be Fishman’s fault that WaMu is screwed if he’s been there 3 months. I’m sure he was counting on having the job for longer, hence, severance.
I guess I was born without the gene that makes you want to kidney-punch people who make a shit-ton of money.
September 26th, 2008 at 10:41 am
You just need to have additional tax brackets for folks up at the millionaire and multi-millionaire level to make sure that the public gets a bigger slice of the pie. If that decreases the incentives for the sort of wild financial shenanigans that brought the country to this point, well, so what?
Preach it, brother!
September 26th, 2008 at 10:50 am
Why limit it to a simple kidney punch? I’d tear off each eyebrow and sew it back in place of the other.
September 26th, 2008 at 10:53 am
I guess I was born without the gene that makes you want to kidney-punch people who make a shit-ton of money…
…off of me while recklessly overleveraging and killing the economy, thus saddling me and my kids with truckloads of debt.
I’m sorry about your genetic deficiency, dude. But you should be able to compensate for it with training.
September 26th, 2008 at 10:53 am
“I guess I was born without the gene that makes you want to kidney-punch people who make a shit-ton of money.”
how about the gene that lets you see that in this case “making” a shit-ton of money means “fucking up a company so that millions of share-holders get ripped off, including people whose pensions held shares?”
you know, do you have a gene that prevents you from seeing that this guy didn’t *make* a goddamn thing? that he was a pure parasite on the pensions of the elderly?
a stupid gene, maybe?
you want to talk about bill gates “making” a shit-ton of money and not deserving a kidney punch, maybe we can talk. but fucking losers who run their companies into the ground, leave millions of poor people holding the bag, and walk away laughing?
they don’t deserve a beating cause they’re rich. they deserve a beating because they are rip-off artists who have committed injustices. the gene you’re lacking is a sense of justice.
September 26th, 2008 at 10:56 am
It says nothing good about my charactor that the first solution that I imagined for this involved hot tar and a feather pillow.
September 26th, 2008 at 10:56 am
And the Democrats should ignore the Rethugs and pass a sane rescue plan with that as a major feature, then dare Bush to veto it. Of course they won’t, their Wall Street paymasters won’t let them.
September 26th, 2008 at 10:59 am
One friend suggests “Obama should suspend his campaign to go punch this guy in the kidney.”
What the hell is wrong with a good old fashioned shot to the balls. Achieves the same effect with way, way more funny.
Example the first.
Example the second.
September 26th, 2008 at 11:00 am
It’s clearly a time for a big increase in tax rates at the high end. Most of the bailout money is effectively going to very wealthy people, so they should pay it back.
September 26th, 2008 at 11:00 am
Where I work, severence is based on length and quality of service and is limited to half of a years pay. To get to $11.6 million, the 136 highest paid employees would need to work 14 years each and earn the best possible reviews of their work in that time to get that much severence.
At least since he’s only been on the job for 3 weeks, we don’t have empiricle evidence that he would be outperfomed in his job by a magic 8-ball.
September 26th, 2008 at 11:04 am
I think Forbes, or one of those other money magazines that likes to compile lists of various companies or CEOs and such, should compile a list of CEOs, CFOs and fund managers who are empirically worse than a Magic 8-Ball.
September 26th, 2008 at 11:06 am
And the Democrats should ignore the Rethugs and pass a sane rescue plan with that as a major feature, then dare Bush to veto it. Of course they won’t
Steve, a few days ago I woul have said this too. But a few days ago I was sure they would ofld and accept the Paulson plan with a few cosmetic tweaks, and yet somehow they’ve found spine enough to say No Deal. So who knows what more is possible?
September 26th, 2008 at 11:13 am
Well, I’ll throw my lot in with too many steves. Yes, the salary controls are a joke. Yeah, I get it, we must punish the very bad men who made this happen. Clearly Alan Fishman must be made to answer for his horrible, horrible crimes.
But, seriously, the salary stuff is a complete sideshow. The problem is a) the tax code and b) the lax regulatory regime that makes financial chicanery so damned profitable. Turning the screws on “fat cats” might delight the mob, but it’s an utter waste of progressives’ time and energy.
September 26th, 2008 at 11:19 am
Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus
He may be eligible to receive that much, but in actuality, will he? I wouldn’t think so – he’s a creditor of the bank, just like lots of other creditors. He’s going to get in line for a piece of the remaining assets (if any), just like all of the creditors, no?
Meanwhile, what’s up with the threat of violence? Seems just as bad as Megan McArdle’s 2×4 remark.
September 26th, 2008 at 11:19 am
i agree that the salary issue is a sideshow.
even ridiculously astronomical corporate compensation pales before the trillions that are involved.
but saying that it is a small matter does not make me agree with too many steves.
the emphasis and the focus should go on keeping people in their homes, sure.
but that is no reason to reward crooks, or to look the other way while they continue their looting.
some clever people can even do two things at once, while keeping a sense of the relative importance of both. (not, obviously, john mccain. he just can’t do it, my friends.)
September 26th, 2008 at 11:25 am
Would introducing new tax brackets actually affect these guys? I suspect a lot of them somehow end up with only 5 or 6 figures of taxable income. And of course the Republican plan is now to tilt things even further in the scum’s favor by completely eliminating taxes on capital gains, which is how the ultrarich make most of their money.
September 26th, 2008 at 11:25 am
Um, isn’t Alan Fisher a Democrat? Just sayin’.
September 26th, 2008 at 11:26 am
It’s exactly like McArdle’s 2×4 remark. Violence is no biggie against people we don’t like.
Anyway, enough class warfare, everybody go read Freedarko:
September 26th, 2008 at 11:27 am
I’m sure that Mr. Yglesias will want to comment on his favorite columnists’ latest column.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092503600.html?hpid=opinionsbox1
September 26th, 2008 at 11:29 am
Where did Fishman come from? He probably had a good job someplace else. The headhunter got paid for placing him. Fishman probably lost some accrued benefits at his old job.
Fishman’s is completely different than someone like Merrill Lynch’s Stan O’Neil.
O’Neil got huge bonuses when it ‘appeared’ that Merrill made huge profits. It turns out that those profits weren’t real. But O’Neil’s bonus sure was real.
Then he gets to leave with a severance that had been guaranteed to him.
It seems to me that before O’neil should have received any severance that they should have gone back and redid the bonus calculations.
If Merrill paid O’Neil $150 million in bonuses that he didn’t deserve then they should have taken that amount out of his severance.
In Fishman’s case, he wasn’t paid anything on phony income. Fishman took a risk that he would be out of a job if WaMu failed. He wanted to protect himself and the contract he signed protected him. There is nothing wrong with Fishman walking away with cash.
It is terrible that people like O’Neil got to walk away with cash after destroying Merrill.
(PS No I am not bitter. I have never worked for Meriill. Luckily!!!)
September 26th, 2008 at 11:29 am
I think we should take a leaf out of Britain’s economic playbook in the 1970s. Before you dismiss me as nuts, consider this. The Labour government in October 1974 took over an economy in crisis. 26 percent inflation. Oil crisis. Property bubble exploding. It was rough for the first eighteen months. Inflation stubbornly high (didn’t start to come down until the end of 1975). Unemployment stubborn. Unions stubborn. But things came around. The infamous IMF loan turned out to be completely unnecessary — they never drew on the credit line. Three percent per year growth returned. Inflation was down, growth was up, unemployment was down all at the same time in 1977 and 1978.
And how? Try radically progressive taxes. Top earned rate of 83 percent. Top unearned rate of 98 percent. Huge tax deductions for corporations on M&E and R&D investments. Corporations put money into building themselves up instead of hiring rock star CEOs.
So how did it all come off the rails at the end of 1978 and allow Thatcher in? Well, after a good two years the government got a bit of, dare I say, George Bush hubris. They got over aggressive with the unions on wage controls, because although inflation had dropped from 25 percent to nine percent in three years, the government was too impatient to be satisfied with that rate of decline.
And the unions knifed them in the back in return.
Margaret Thatcher’s controls on the unions, similar to what Labour had first proposed in the 1960s, were a small consolation for everything else that happened.
But the moral of the story remains. The right kind of taxes on the right can spur remarkable economic successes even in the worst of situations — for the simple reason that if wastefulness (such as rock star salaries for rock star CEOs) is penalized through the tax code, it won’t occur, whereas if wastefulness is rewarded through the tax code, it will occur.
September 26th, 2008 at 11:33 am
I don’t know what a television host, baseball player, CEO, or a really good roll of sushi is worth, because I am rarely in the market for any of these things. If I found out their market value, I’d probably wonder why some people pay so much for them. But why I should think my estimation of their value should be codified into law escapes me–unless of course I just think I am smarter than the millions of other people who willingly pay such high amounts.
September 26th, 2008 at 11:46 am
I think people are missing the genuine, free market purpose of whacking CEO and executive salaries after this sort of financial clusterbleep. The ethical reason may be to punish the folks responsible and the political reason may be to placate the masses pissed at their money bailing out those jackasses. The free market reason, however, is that going after those salaries is the simplist and most direct way to cause pain to people on Wall Street or have them watch people they know suffer pain, so that they can come out of this fiasco with some kind of sense memory that will make them all less likely to repeat this effin’ process again in another 10 years. These horrible fools have been touching the stove with oven mits on. We have to take off those mits and force their hands down on the burners, so they’ll never even think about touching the stove again.
Mike
September 26th, 2008 at 11:57 am
Jeff,
The firms that are going to take advatage of the bailout will benefit more from their participation in the bailout than they will from any financial wizardry their CEO performs. Nothing a CEO does will make these companies more money than saying, “let’s sell our crap securities to the government.” That is a very safe bet. If firms believe differently, they are free to not take part in the bail out and have their brilliant CEO make them piles of money that more than make up for their choice.
September 26th, 2008 at 12:02 pm
Eventually, there will be some sort of bailout plan passed. Nobody wants to be held responsible if no plan is passed and catastrophe ensues. The Democrats should focus more on forcing McCain to vote for the plan and less on the House Rethuglicans. The important thing is to prevent McCain from being able to demagogue on the issue, since, presumably Obama will vote for it and a yes vote by the former will prevent such demagoguery.
September 26th, 2008 at 12:09 pm
“Pour encourager les autres.” I’m not saying that you should pick one of these fucker CEOs at random and hang him, but having one tarred and feathered on national television might be an option.
September 26th, 2008 at 12:15 pm
I’m with Neil Wilson on this one. It’s not like Fishman created the problems, and he was willing to take on a very risky job, presumably giving up a safer one to do so. This is a good argument for progressive taxation, however, as many other commenters have pointed out.
September 26th, 2008 at 12:49 pm
Explain to me again how a CEO can profit wildly from a failing business while employees get no compensation? I’m sure there’s some fabulously convenient law to allow for this, but my question is why doesn’t anybody revolt against this and ransack this guy? It’s not right.
September 26th, 2008 at 12:54 pm
I hope you will take into account how the people made their millions and act accordingly. Isn’t there a difference between someone who starts a business and makes it successful and someone who becomes a CEO of a huge company? An entrepreneur takes risk that a manager doesn’t.
September 26th, 2008 at 12:57 pm
Senator Bernie Sanders suggests paying for the Wall Street Bailout (aka Save the Billionaires Fund) with a surcharge on taxes paid by individuals making more than $500,000 a year or couples earning more than $1 million a year.
September 26th, 2008 at 1:07 pm
With McCain, my dear boy. They’re laughing with McCain.
September 26th, 2008 at 1:56 pm
This over-the-top militant populism is a bit ridiculous. Didn’t Matt grow up in Manhattan and go to an exclusive private school?
I agree that this guy is not in the same ballpark as the others. Stock options are where the action is, not salary.
September 26th, 2008 at 3:46 pm
It sounds like none of you are in the mood for coloring book lessons on how capitalism works better because with great incentives you attract the best and brightest to run your company into the ground. You people are all cynics.
September 26th, 2008 at 4:27 pm
I’m with Wilson, too. I have friends that work for WaMu that almost certainly are going to be job-hunting in a crap economy very, very soon, but you can’t blame it on a guy who’s been there 10 minutes when WaMu’s problems started years ago. And you really can’t blame him for doing a little CYA as he came into what was obviously a tough situation.
Absolutely, blame the folks who caused the problem. And tax all the richies – let god sort ‘em out.
September 26th, 2008 at 6:51 pm
* You just need to have additional tax brackets for folks up at the millionaire and multi-millionaire level to make sure that the public gets a bigger slice of the pie. If that decreases the incentives for the sort of wild financial shenanigans that brought the country to this point, well, so what? *
Yeah… that’s the ticket… Socialism and Communism, because they’ve worked out SOOOOOO well everywhere else.
Not.
-Dan
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