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Paid for Non-Performance

Last week, I commented that Stan O’Neal, ex-CEO of Merrill Lynch, was “paid for his performance” when shown the exit door after Merrill’s $8.4-billion write-down. I received a number of emails commenting that I failed to address that he walked away with at least $159 million and was eligible for a severance package. The readers were incredulous that failure on the part of a CEO can translate into big paydays on the way out. This week, another shoe dropped with the “retirement” of Chuck Prince, Citibank’s CEO, on the heels of an announcement that the bank will take an $11-billion write-down. He leaves with $105 million in cash and stock. By any measure, the losses revealed by Merrill and Citi are incomprehensible, but no more astounding than the payments to the guys on top who were, in fact, paid for their non- performance.

Tony LoPinto is CEO of Equinox Partners, an executive search firm specializing in the real estate industry, and parent company of SelectLeaders. The views expressed in this article are the author’s own.
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SELECTLEADERS Junior Analyst–Commercial Real Estate(AUSTIN) The company seeks an analyst to support its growing portfolio of defaulted US commercial mortgage loans under the company’s appointment to service commercial mortgage-backed securities trusts.

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