Interesting People mailing list archives
Re: CEO pay: What those involved in the financial meltdown made
From: David Farber <dave () farber net>
Date: Fri, 26 Sep 2008 16:40:30 -0400
Begin forwarded message: From: "Perry E. Metzger" <perry () piermont com> Date: September 26, 2008 3:56:49 PM EDT To: Rich Kulawiec <rsk () gsp org> Cc: David Farber <dave () farber net>Subject: Re: [IP] Re: CEO pay: What those involved in the financial meltdown made
Rich Kulawiec <rsk () gsp org> writes:
On Thu, Sep 25, 2008 at 09:54:50PM -0400, Perry Metzger wrote:Barclays bought Lehman's broker-dealer operations and wants the employees to stay instead of flee. If they flee, the purchase would have been worthless, because such a firm has few important assets other than the staff. To keep people from leaving, Barclays, the purchaser, is paying bonuses to the staff to keep them from leaving.Given that Lehman's staff have just run the company into the ground, why would anyone consider them an "asset" and not a "liability"?
If you had read the message I sent, you would be aware of the fact that Lehman is a large company, and Barclays did not buy the portions that were involved in the debacle. They bought the broker-dealer operations, not the guys who packaged up mortgages, and not the people who invested in them. However, I will point out that the vast majority of the staff even in the REIT, merchant banking and other operations, which Barclays did not buy, are fine people who did nothing wrong -- accountants, clerks, secretaries, etc.
Retain them with bonuses? I think a much better strategy would be to fire them outright by the busload, and then sue them to recover any bonuses paid in the past decade.
What would the point of buying a company be if you did not plan on having it be worth anything? How could the new owners sue people for doing their jobs in the past before Barclays bought the firm, and why would Barclays want to do such a thing? To repeat the situation: Barclays bought Lehman's broker-dealer operation. That includes many many thousands of people -- computer programmers, people who clear and settle trades, account representatives, people who work trades on various exchange floors, secretaries, computer networking and systems administrators, etc. Barclays presumably bought this operation so that they could make money off of it as a going concern -- they didn't buy it for the fun of it. Destroying the company would eliminate any possibility of getting a profit from the purchase, and without any of the staff staying, there would be no company. Now, why exactly would you sue, say, a computer programmer for being paid bonuses over the last decade? The average Wall Street programmer gets paid almost entirely in bonuses, you know, and the average Wall Street programmer has nothing to do with business decisions. Do you imagine that by "suing [the programmer] to recover any bonuses paid in the past decade" that Barclays would manage to keep this person working for them? Do you imagine they would have a case, given that the person probably did nothing more than writing lots of C++ code? Do you imagine that this would further Barclay's business interests or reputation? Perry -- Perry E. Metzger perry () piermont com ------------------------------------------- Archives: https://www.listbox.com/member/archive/247/=now RSS Feed: https://www.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com
Current thread:
- CEO pay: What those involved in the financial meltdown made David Farber (Sep 23)
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- Re: CEO pay: What those involved in the financial meltdown made David Farber (Sep 24)
- Re: CEO pay: What those involved in the financial meltdown made David Farber (Sep 25)
- Re: CEO pay: What those involved in the financial meltdown made David Farber (Sep 26)
- Re: CEO pay: What those involved in the financial meltdown made David Farber (Sep 26)