Executives pocket US$3bn during the fall of Wall Street

NEW YORK – Wall Street’s five biggest companies paid more than US$3 billion (N$24,1 billion at current exchange rate) in the past five years to their top executives while they presided over the packaging and sale of loans that helped bring down the investment banking system.

Merrill Lynch, once the largest US brokerage, paid its chief executives the most, with Stanley O’Neal taking in US$172 million from 2003 to last year and John Thain US$86 million after a month’s work last year. The firm agreed to be acquired by Bank of America for about $50 billion on September 15.Bear Stearns’ James Cayne made US$161 million before the firm collapsed and was sold to JPMorgan Chase in June.Democrats and Republicans in US congress are demanding that limits be placed on executive pay as part of the US$700 billion financial rescue plan.Charles Elson, the former Goldman Sachs Group chief who received about $111 million between 2003 and 2006, said in testimony to congress last week that he would accept such limits as part of the plan, after initially opposing them.”Shareholders and boards should have done something about this a long time ago,” said Elson, the director of the Weinberg Centre for Corporate Governance at the University of Delaware in Newark.”They justified these levels of pay on the idea that they’re all geniuses.I think that balloon has burst.”Wall Street firms have shared profits liberally with employees.The five biggest – Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns – paid their 185 687 employees a total of US$66 billion last year, as problems with subprime mortgages mounted.That amounts to average pay of US$353 089 per employee, including an average bonus of US$211 849.These firms had combined net income of US$93 billion during the five years through last year.The US$3,1 billion paid to the top five executives at the firms between 2003 and last year was about three times what JPMorgan spent to purchase Bear Stearns.Business ReportThe firm agreed to be acquired by Bank of America for about $50 billion on September 15.Bear Stearns’ James Cayne made US$161 million before the firm collapsed and was sold to JPMorgan Chase in June.Democrats and Republicans in US congress are demanding that limits be placed on executive pay as part of the US$700 billion financial rescue plan.Charles Elson, the former Goldman Sachs Group chief who received about $111 million between 2003 and 2006, said in testimony to congress last week that he would accept such limits as part of the plan, after initially opposing them.”Shareholders and boards should have done something about this a long time ago,” said Elson, the director of the Weinberg Centre for Corporate Governance at the University of Delaware in Newark.”They justified these levels of pay on the idea that they’re all geniuses.I think that balloon has burst.”Wall Street firms have shared profits liberally with employees.The five biggest – Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns – paid their 185 687 employees a total of US$66 billion last year, as problems with subprime mortgages mounted.That amounts to average pay of US$353 089 per employee, including an average bonus of US$211 849.These firms had combined net income of US$93 billion during the five years through last year.The US$3,1 billion paid to the top five executives at the firms between 2003 and last year was about three times what JPMorgan spent to purchase Bear Stearns.Business Report