Don't you just hate it when people who are dumber than you earn a thousand times more?
Still, it's not as bad as when someone is handsomely rewarded for their stupidity. Therefore, we have another Golden Boot Award to offer: Stan O'Neal, recently promoted to Former Chairman and Chief Executive of Merrill Lynch.
It seems he was shocked to discover that gambling on sub-prime mortgage was an unsustainable business model.
From the Wall Street Journal:
Merrill last week reported a third-quarter net loss of $2.2 billion after writing off $8.4 billion of mortgages, collateralized debt obligations and loans. Two and a half weeks earlier, Mr. O'Neal had said the writeoffs would be $5 billion, and earlier in the summer, he and other Merrill executives said the subprime mortgage crisis appeared to be overblown.
The only thing that's overblown here is the practice of promising to reward CEOs with pirated treasure no matter how much they screw up. Less than three weeks ago he still didn't know the extent of the losses, and three months ago he thought things were just hunk-dory.
For keeping such a keen eye on the business, he walks away with $160 million, including a pension that could give him $2 million a year for life. That ought to keep him in gold-plated bifocals for a while.
The Journal notes that he "will receive no severance package or annual bonus." Damn, that's cold. His money comes from "various pension plans and stock grants."
It's the wonder of American capitalism. Never build performance considerations into CEO compensation. The CEO in sheep's clothing is allowed to walk away richer than a wolf in a flock of tethered sheep, while the employees are led to the slaughter with pink slips to make up for his mistakes.
Now I may be more naive than a socialist in a libertarian world, but where's the self-correcting nature of this scenario?
It's a good day to be fired.