Under (former-Fannie CEO) Franklin Raines' leadership, Fannie overstated earnings by $10.6 billion...while paying Raines and his senior management team massive bonuses (Raines raked in $90 million between 1998-2003, largely in bonuses). According to a May 2006 report from OFHEO, Raines' goal was to keep earnings per share as high as possible. He motivated management to achieve that goal by setting up a bonus system that rewarded increasing earnings per share (EPS)...and by ignoring the little things, like accounting rules, debt levels, and risk factors.
Former-Fannie CFO Timothy Howard signed off on the financials that overstated the company's earnings by $10.6 billion from 1998 to 2004. For his efforts, he received $14 million in salary and $16.8 million in bonuses.
Former-CEO of Freddie Mac, Richard Syron, has collected more than $38 million in compensation since 2003. Over 12 senior executives who had repeatedly warned Mr. Syron since 2003 to reduce risk, cut back on the purchase of risky (low-income borrower) loans, and increase capital reserves had left the company in disgust. Syron's severance package -- FOR FAILING TO PREVENT GOVT TAKE-OVER!! -- was $14 million! Daniel Mudd, CEO of Fannie Mae prior to the take-over, received $9 million for his failing efforts.
Former-CEO of Lehman Brothers, Richard Fuld, was awarded a $22 million bonus for 2007, reflecting "success" in a year in which the bank's net profit had risen 5 percent to a record $4.2 billion. Another example of aggressive short-term greed-driven strategy at the expense of prudent, smart growth. Demonstrated even further AFTER its melt-down, whereupon a bonus pool worth $2.5 billion was set aside for up to 10,000 Lehman staff at the New York office of the bankrupt investment bank. Nothing was set aside for workers in its London branch.
Former-CEO of Countrywide, Angelo R. Mozilo, is the grand-pooba of immorality. He received $100 million for stepping-down after Bank of America's take-over (which, mind you, will be paid for by American taxpayers as BofA, a perfectly profitable company, can now write down its federal and tax payments by $100 million/year thanks to its purchase of Countrywide's exhorbitant losses). Mozilo's reward ain't too shabby for bankrupting a company and destroying thousands of people’s lives. Oh, and, let's not forget about Mozilo's unloading of 4.9 million Countrywide shares worth more than $138 million between November 2006 and August 2007...just prior to the collapse of the housing bubble and the collapse of Countrywide. At least the SEC is investigating this "suspicious activity"!!
A glimmer of moral character in an otherwise dark and gloomy landscape of corporate greed is AIG's ex-CEO, Robert Willumstad. He declined the $22 million severance package offered to him after the recent government bailout. Because he failed to execute the company's turn-around strategy, he felt he didn't deserve the severance package. Finally! A CEO with a stitch of morality woven into his magic CEO cloak. KUDOS!!