WASHINGTON: As Congress and the White House wrestle over the terms of a financial rescue bill, Democrats on Capitol Hill are drafting language designed to rein in executive compensation, in particular controversial severance packages at foundering companies on Wall Street. And for politicians concerned about the growing backlash on Main Street over what many see as a bailout of Wall Street, executive pay is a ripe target. Average total pay for a CEO at one of the 500 biggest companies last year was $12.8 million, double what it was a decade ago.
Goldman Sachs chief executive Lloyd Blankfein, for instance, took home nearly $54 million in salary, perks, bonuses and other stock awards in 2007. J.P. Morgan Chase chief executive James Dimon collected $30 million in cash, stock and options.
Critics of executive compensation have pointed recently to the $14.6 million that Lehman Brothers CEO Richard Fuld raked in last fiscal year. Under his guidance, Lehman Brother continued to invest in bad mortgaged-backed securities in 2007 even as the subprime blowout was in full effect, leading some to question Feld’s judgment and wonder why he received performance-based bonuses for these poor investment decisions.