CEOs Of Failed Companies Collecting Fat Paychecks

WBZ

A lot of people are outraged about the millions of dollars the fat cats running failed companies are getting paid, and many people are letting it all out on our Curiosity Web site.

Here are just two postings: "Why are CEOs so handsomely rewarded for driving a company into financial ruin?" And "I don't feel like I should have to bail out all the greedy, irresponsible people who have created the current crisis."

So what gives? Why do these big shots get the big bucks, and is anything going to change?

Look at these numbers: Lehman Brothers' former CEO Richard Fuld's total compensation last year was over $34 million.

AIG's former CEO Martin Sullivan's package was $14 million. Just two of the CEOs now part of the decline and fall of Wall Street.

How do CEOs from some of the biggest Massachusetts companies stack up?

Take a look, but remember, they're not part of the bailout.

• Raytheon chief William Swanson, $19 million last year.
• EMC CEO Joseph Tucci, $17 million.
• Biogen's James Mullen, $12 million.
• Staples CEO Ronald Sargent, $11 million.

  Why the enormous pay packages? The theory is you have to pay the top dogs millions upon millions to get them and keep them, and that they're so skilled they'll bring success and riches to their companies.

  "One reaction to that that the common person has is, hey, for half that I'd come!" says Allan Cohen, a management professor and dean of the Graduate School at Babson.

  He says these are difficult and highly valued jobs, but that executive compensation has gotten out of control.

  "It demoralizes people inside companies. It gets them to look at it and say, this is grossly unfair. I shouldn't have to kill myself compared to someone who's walking away with millions and millions," he adds.

  And when top management of troubled companies keep their golden parachutes, even Congress is taking them to task.

  "They were getting their manicures, their facials, their pedicures, while American people were footing the bill," says U.S. Rep. Elijah Cummings, a Maryland Democrat.

  We've even seen the contrite CEO before Congress.

  "I feel horrible about what has happened to the company," says former Lehman CEO Richard Fuld.

  Rich Rogers runs the Greater Boston Labor Council, a coalition of about 150 unions. He calls CEO compensation "obscene."

  "Not only do these people get paid too much, but the average worker gets paid too little," he says.

  Babson professor Allan Cohen says change is coming, and that some CEOs of failed companies are going to have to give some money back.

  "There is going to be a movement to take it back, and if it requires new laws, there's a very good possibility that we'll have them," he says.

  "Hopefully the Federal Government, SEC and other agencies responsible for watching corporations are going to step up and do their jobs, because they haven't done it for the last 8 years," says Rich Rogers.

  The bailout bill does have some strings attached concerning CEO compensation, and some people think the new administration will add more.

  This trend toward huge compensation packages began about 20 years ago when paying CEOs with stock options became popular. If the company stock did well, the leadership did extremely well. The problem is, for some CEOs, deals are written in a way that they do extremely well even if the company doesn't. And that's what a lot of people say should change.

Look up the pay packages of CEO's

And be sure to tell us what your Curious about

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