$18 Million For Three Weeks On The Job: No Wonder The System is Broken

by

So as you know by now there was a blood bath on Wall Street Today with the Dow recording its largest one day point loss.  Larger than any day during the great depression, larger than the first day of trading after 9-11.  It is reported more than 1 Trillion dollars in equity was lost today in the market.

Yes its worth repeating, 1 trillion dollars lost in one day.

How did we get in this mess?  I’m not smart enough to even take a run at it.

But I did find an incredible example.

Take the case of Washington Mutual Chief Executive Alan Fishman.

This bank otherwise know as WaMu was “bought” last week by JPMorgan Chase, after federal regulators seized the company making it the largest bank failure in history.

It appears that Mr. Fishman might walk away with more than $18 million in salary, bonuses and severance after less than three weeks on the job, according to the terms of his employment agreement.

Fishman was hired on Sept. 7, replacing former long-time CEO Kerry Killinger, who was ousted as a result of the company’s many financial woes.

Fishman had a base annual salary of $1 million, which translates to $19,230 per week. So during his three weeks on the job, he would receive a base pay of about $60,000 before taxes.

His target annual bonus was 365% of his salary, or $3.65 million..

The agreement said that Fishman could be eligible in 2009 for a long-term incentive award, which would be worth at least $8 million. But the agreement also said this is based on the assumption that would serve as CEO for the “full year” of 2009.

The agreement also provided that if Mr. Fishman has to pay taxes because of any severance he receives as a result of the takeover, then the company would cover those taxes.

That would potentially give Fishman millions of dollars more.

Fishman also got a multi-million dollar sign-on bonus.

Fishman’s sign-on cash bonus was $7.5 million as well as 612,500 shares of WaMu, which are now virtually worthless but it is unknow if any of his shares were sold.

If Fishman is terminated without “cause”,  which could very well be this case where his the job was lost due to a takeover of the firm, he receives a lump severance payment of $6.15 million, including his $3.65 million

When you add up his salary, the possible bonuses and the lump sum payment, Fishman could walk away with more than $18 million for three weeks on the job and being on the watch when the company went bust.

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

Comments

  3. Jamie says

    I would have to think a Lawyer was deeply involved in writing up his contract, with another one to agree to it and one more to tell them both they did a good job. 🙂

    Sadly, this lawyer forgot to think of the company they were working for.

    Not pointed at you Michael (your a domainer in my eye’s with great legal knowledge) but some blame has to be put on the lawyers?

  5. Ms Domainer says

    *
    I had my mortgage with WaMu–not by my choice. They had bought my loan from HomeSide Lending, who had bought it from GMAC. Each time my loan was sold, customer service went into the toilet. WaMu was atrocious, though they did have a good online platform.

    Two years ago WaMu tried to sell my loan to Wells Fargo–shortly after WF had overnighted legal papers that (had I signed) would have changed the terms of my loan–in their favor, of course. I tore up the papers.

    I decided I didn’t want to do business with WF, so I paid off the loan.

    I was lucky in that I was able to pay it off, but I’m sure a lot of homeowners are going to suffer from this mess.

    Most of the blame has to go to our legislators, from both parties, who simply allowed Wall Street run amok, unregulated, making dicey deals and kiting worthless paper.

    Part of the blame has to go to numskull home buyers
    who financed McMansions they couldn’t afford and the lenders who approved those risky loans.

    I’ll never believe that this whole collapse wasn’t foreseeable.

    Now Mr. and Ms. Taxpayer is going to pay through the nose.

    *

  6. GPS says

    Whether we like it or not, Mr. Fishman’s contract is probably the going market rate for CEO’s of firms of that size and stature (prior size and stature, that is). Big signing bonus + hefty salary + stock options + severance package is what it takes to get a person that has the credentials to run a shop like this.

    Massive salaries like these make my stomach turn, but massive salaries certainly aren’t the primary cause of the current wall street problems.

  7. David says

    I don’t think this mortgage mess comes as a surprise. I’ve been hearing about the doom-and-gloom about the impending mortgage crisis for about 5 years now… I figured everything would tank LAST year and I was wrong… finally happened I guess. Good buying opportunity, though.

  12. Scott Kozlowski (Koz) says

    @ Ms Domainer,

    I keep hearing how Wall St is to blame and the government needs to have more regulations.

    If you represent the average american and think that in a free market economy more government regulation is a good thing and the answer to a hyper-inflated market, that is crashing all around us.

    Then we all will suffer the consequences!

    What a bunch of crap!

    This mess is nothing more than another example of
    of the aftermath of a burst speculative bubble.

    The madness of crowd phsychology can not be underestimated.

    Wall St does NOT create these bubbles!!!

    The lemmings in this country do!

    Wall St is just a supplier to the lemmings that are running rampant and “getting rich quick”.

    Ms Domainer, are you a lemming to?

    Why don’t you try and find out the root cause of hyper-inflated markets and understand the dynamics of how these markets work before you just sound off.

    By doing so you just sound like one of the lemmings that are now screaming for government intervention and regulation.

    Why? Just because this one effects them.

    The government needs to regulate the lemmings from their own stupidity!

    Ms Domainer, if you are passionate about this, learn about.

    You don’t learn by watching the news, reading the papers and surfing the net!

    Pick up a book!

    Koz

  13. Stephen Douglas says

    Eight years of continuing disasters on a scale rarely seen within one President’s term. Strangely, each disaster that’s hit the U.S. during the Bush Administration somehow has made Bush’s pals A LOT OF MONEY. Now, just before Bush says “bye bye suckers” to the American people, this odd, weird, unexplainable economic blowup occurs.

    I have heard some news on executive parachutes and bonuses from these satanic entities calling themselves “presidents/executives” of these failed companies, but has anyone sat down and added up the amount of money sucked out of the failed companies in total? I’ll bet over a few billion dollars or more have been funneled away from investors while these companies tanked.

    I smell a revolution. OOPS!! Now, I just brought the attention of the US secret intelligence blackhats to this blog site, and all the people posting here, because the “Patriot Act” (the aptly named legislation that makes you a “patriot” if you give up your Constitutional rights) allows the government to spy on you and everyone you connect with online, without a search warrant.

    Every one on this blog is now being spied on, which includes your family, your friends, and coworkers (and the people connected with them, and so on, and so on and so on, and …). All you have to do is post words like “revolution”, “I hate bush” or other comments that makes you seem like you could be a “problem” for the people in power, and they put you and everyone you know on a “list”.

    I can hear the weird clicks on my phone right now. Sorry to do this to you, Mike, but heck, in a week, we all will be rushing the supermarkets and gas stations to stock up on food and fuel. Don’t forget ammunition, unless you’re one of those “softy liberals” who think being on the “left” means you can’t have hardware to protect you from govt oppression. I’m a liberal and I say “don’t touch my right to any utilities I use for self -protection from the government or any other scummy intruder”

    This post is just a “fantasy scenario”, but how far from the truth do you think it is?

  18. Nolan says

    Deregulation is what created this bill – along with the greed that most of us have. So it’s Wall Street’s fault, Congress’ fault, the average investor’s fault, automatic trading software’s fault.

    But in the end, they should just let it all shake out. Someone in a post above was right, this is just a big trick set up to look like a crisis.

  19. Damir says

    Corporate criminal activity is paying very well.

    The Government wants to prosecute people which are not employed and are on social security if they do not report that they have an additional income but does not prosecute the Management in Company’s that are actually NOT Managers – University qualified IDIOTS (no offense to the “rare bread” 3-4% of people that are decent Managers)

    Imagine yourself working in that kind of Corpseration if you are just a staff member seeing this evil titleholders lying, stealing (writing of their personal expense to the Company), blaming their staff for their shortcomings and many other crap this so called Managers do.

    Welcome to the Culture of FEAR – in the USA and Australia this is typical way – they call it Teamwork

  20. Stephen Douglas says

    I’m still dealing with my immediate suspicion of 9/11 and how it ushered in a whole new “supportive” world for the Bush Administration, and a beneficial marketing campaign pushed over and over again to get Americans to “fall in line” with what Bush and his cronies (don’t forget Cheney, who quit as CEO of Halliburton to accept the VP position).

    http://www.youtube.com/watch?v=m3JmXQ-z8S4&feature=related
    I didn’t believe Bush then.

    Next we have the reason to attack Iraq, instead of using all resources to hunt down the supposed mastermind of 9/11 attacks, Osama bin Laden. Strangely, Iraq was suddenly more important than the terrorist leader bin Laden. I wonder why. We all know now that the Iraqi War was a setup, and lots of Bush/Cheney pals are making LOTS OF MONEY from it from no-bid contracts.

    Now, before Bush leaves office, he thumbs his nose one last time at the American people, and their children, and asks for money to rescue his pals on Wall Street, who played their greed too close the the fire and got burned. Bush and his associates are looting the burning house. Let’s help them out and give them all the money they ask for. They deserve it, for their brilliant scam for 8 years on the dumbest populace of a country since the Germans in 1933.

    Do we believe what anyone in the White House tells us? Are we totally stupid? Or do we just want to vote on party platforms that promote one-topic issues that make the dumbest of the dumb vote Republican, even against their own economic interests (anti abortion, anti-tax, anti gun control, pro prayer in schools, vote Republican).