Posted on 12/30/2008 9:39:28 AM PST by cmdjing
Where is the government's bank-bailout money going? In part to pay for Wall Street banker Peter Kraus's $37 million Park Avenue spread.
Kraus had excellent timing. He signed on as a top executive at Merrill Lynch in May, negotiating a $50 million pay package, with much of that guaranteed if the company was sold. He didn't officially start until September. A couple of days later, Merrill CEO John Thain sold the company to Bank of America for $50 billion, triggering a $25 million payout under Kraus's contract.
Bank of America got a $25 billion capital injection from the government. Kraus resigned and collected his cash, taking a job as CEO of AllianceBernstein, a money-management firm. And then he bought, for an estimated $37 million, an apartment at 720 Park Avenue from Democratic fundraisers Carl Spielvogel and Barbaralee Diamonstein-Spielvogel.
Let's be clear: Kraus got this apartment fair and square: He suckered Merrill Lynch into a pay guarantee, and had the gall to hold Merrill and Bank of America to his contract, even though he only worked a couple of days.
Bankers deserve bonuses — but only when they really earn them. Thain, who arguably saved Merrill Lynch from the disastrous fate of Lehman Brothers and Bear Stearns, declined to seek a bonus this year, but he would have been justified in getting one. Kraus got a bonus, but he didn't earn it. He did nothing illegal. He just did something unseemly.
The 5-bedroom spread technically belongs to Kraus's wife, who was listed as the purchaser. But given the circumstanced of its sale, I like to think it belongs to all of us. Behold the splendor of the People's Palace.
25 million of taxpayer backed golden parachute for less than 3 months of nothingburger. Good work if you can get it. And all I wanted was a pony...
Don't blame Kraus, blame the Board at Merrill Lynch that approved such an outrageous contract.
I can't believe there aren't more shareholder actions against these wreckless CEO contracts.
Probably a Democrat, but I haven't checked the donation db.
Behavior like this causes socialism.
“And then he bought, for an estimated $37 million, an apartment at 720 Park Avenue from
Democratic fundraisers
Carl Spielvogel and Barbaralee Diamonstein-Spielvogel.”
Fundraising must be BIG business!
Atleast this guy wasn’t a “fund raiser”.
Exactly!
Right or wrong, everything fell under the rules of his contract no matter how outrageous it may seem. That company approved his salary and his contract. It’s his money...
To be a little fair, Kraus’ guarantee was the money he left behind at Goldman Sachs (unvested stock, deferred compensation etc...) Merrill had to buy him out to entice him to come. While he clearly didn’t earn that at Merrill (though he was a key negotiator in selling the company according to yesterday’s Wall St. Journal), that was money that he earned at Goldman Sachs in previous years that he didn’t collect yet (golden handcuffs).
I’m uncofrtable belittling this man. He simply lucked out. It’s up to the stock holders and company at large to determine compensation.
What am I curious about is how did the FORMER OWNERS,
Democratic fundraisers Carl Spielvogel and Barbaralee Diamonstein-Spielvogel afford this?
What am I curious about is how did the FORMER OWNERS,
Democratic fundraisers Carl Spielvogel and Barbaralee Diamonstein-Spielvogel afford this?
True but I bet if you asked most people they would assume he is a Republican, seems over half the country believe rats can do no wrong.
Instead of handing out 700 Billion to all the banksters. A nice 5000 dollar check from Paulson to every American taxpayer would have probably done a lot more. Oh well, c’est la vie.
It doesn't say much about a person who takes money he didn't earn.
‘Behavior like this causes socialism.”
No behavior like this causes bankruptcy, or it should. Socialism causes socialism. That and stupidity.
” It doesn’t say much about a person who takes money he didn’t earn.”
Well he did leave his last plush job wherever that was. He woulda been unemployed and broke without it.
How did he “not earn” it? Two parties agreed to a contract stating he would be paid should the company be sold. It was. He got paid according to the contract. Contracts are the foundation of our market system.
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