You’re Fired! Here’s a Few Million Bucks

July 29, 2008

Thousands of employees at troubled companies like Fannie Mae, Freddie Mac, Countrywide, Sprint and IndyMac have found themselves out of jobs and health insurance through no fault of their own.  The CEO’s who helped lead the companies into trouble are, however, doing just fine.

Fannie Mae and Freddie Mac, the nation’s two largest holders of mortgages, recently had to lay off hundreds of employees.  IndyMac laid off 2400, Sprint had to let 4000 go, and 12,000 Countrywide employees lost their jobs. These former employees are now without benefits and looking for jobs in a troubled economy.

The CEO’s who helped run these companies into the ground managed to avoid such harsh measures.

Even though Fannie Mae lost $2.1 billion in 2007, CEO Daniel Mudd made off with $12.2 million last year, and was able to keep his job. While Freddie Mac was losing $3.1 billion, CEO Richard Syron earned $19.8 million as a reward for his efforts. No need to bail them out.

It also pays to be president of a failing bank. IndyMac lost $615 million and had to be taken over by the FDIC, but not before CEO Michael Perry, who told investors in April “business is improving,” kept over $1 million for himself. With FDIC insurance capped at $100,000, we hope he didn’t deposit all of it into just one bank.

Countrywide, the poster boy of the sub-prime mortgage crisis, lost over $700 million, but amiable President Angelo Mozilo walked off with $10.8 million last year. No bad deed goes unrewarded.

Former Sprint President Gary Forsee, however, wins the prize for losing the most money for his company while taking the most. Sprint lost $29.5 billion in the last quarter of 2007, but he was just fine with the $40 million severance package his grateful company gave him. “Let them eat cake,” right Gary? I wonder if the 4000 laid off employees threw a retirement party and added a gold watch to his haul?

The mortgage crisis rescue bill passed by the Senate contains new proposed powers for federal regulators to rein in lavish executive compensation packages. As usual, another barn door is closed after the horses have gotten out.