Harsha Agadi, Friendly's CEO, Billed Chain $243,000 In Expenses Before It Went Bankrupt

The CEO of Friendly's sent the ice cream giant hundreds of thousands of dollars worth of expenses the year before the company filed for bankruptcy.

Harsha Agadi billed Friendly's $234,000 for expenses the year before the company went bankrupt the Wall Street Journal reports. That's on top of the $190,000 the company spent to move Agadi when he became the restaurant-chain's head last year. Friendly's filed for bankruptcy last month, closing more than 60 stores and slashing more than 1,000 jobs.

Agadi's expense reports may seem outlandish, particularly given the company's tenuous financial state but it's not uncommon for employees to expense employers for large sums or for things that aren't actually a company expense. The Austin, Texas-based Association of Certified Fraud Examiners said that fabricated expense reports accounted for 13 percent of all employee thefts in the U.S., according to ABC News.

Agadi isn't the first CEO of a troubled company to net huge perks. Leo Apothecker, the former head of Hewlett-Packard, took home $13.2 million in cash and stock severance last month after his run with the company ended. Another former HP CEO Mark Hurd was forced to resign after he tried to hide a relationship by falsifying expense reports.

Robert Kelly, the former CEO of Bank of New York Mellon, got a severance worth $17.2 million after he was pushed out of the bank and Carol Batz, the former CEO of Yahoo netted $10 million after she was fired from the company, according to the NYT.

And other CEOs have made headlines recently for taking home huge pay packages not to do their jobs. Douglas Foshee, the head of El Paso -- the natural gas pipeline operator acquired by Kinder Morgan last month -- is eligible for an exit package worth $95 million if he leaves the company within two years of the merger. Eugene Isenberg, the former CEO of Nabors Industries, took home $100 million in cash for dropping his title of CEO last month.

But huge severance packages or the ability to expense hundreds of thousands of dollars aren't the only perks of being a big-time CEO. Despite the economic downturn, corporate chiefs are still netting corporate jet access, country club memberships, financial planning services and other perks as part of their compensation packages, according to USA Today.

And even without the perks, corporate executives are taking home bigger paychecks than they were before; CEO pay went up 27 percent on average in 2010, according to Labor Department figures cited by PBS.

CORRECTION: A previous version of this post mistakenly said Leo Apothecker was fired for falsifying expense reports. It was former HP CEO Mark Hurd that was fired after he tried to hide a relationship by falsifying expense reports.

Comments

[schatsie]

10:38 PM on 12/14/2011

It is time for EVERY FORTUNE 500 Board of Directors Member to get a Psychiatric Evaluation.....every one of them.....

[jzannoni]

03:36 AM on 04/08/2013

They are all friend and buddies of each other. Elite schools, the Hamptons, golf clubs. They make each other rich and want to stay that way. Screw the workers.

[schatsie]

08:55 PM on 04/09/2013

I know I was reading about the JC Penny CEO who got the ax after less than 2 years and 'earning over 60 million in that period of time...DO THE MATH, that is the equivalent of 1000 people earning 60 grand per year....   and THE FRIGGING BOARD OF DIRECTORs signed off on the compensation agreement and KNEW EXACTLY what they were doing...Of course they were paid hundreds of thousands for a week of work....

[MtnGeek]

11:50 AM on 11/22/2011

Yet another CEO who felt he was more important that the company he supposed to be running. How many more examples of this do we need before the argument that CEO's deserve exponentially larger salaries than the employees is complete debunked?

[schatsie]

10:39 PM on 12/14/2011

And that is EXACTLY why I am for income tax rates of 91% on income over 2 million dollars.....

[GloriaY]

11:52 PM on 11/21/2011

Its called biting the hand that fed him. Shameless, greedy, unconscionable, corrupt thief. How can he possibly do this to the investors and stock holders and walk away with millions of their money in his pocket? He deserves serious jail time.

[schatsie]

10:42 PM on 12/14/2011

That is exactly what Charles Keating was convicted of under RICO statutes....

But Bush has packed the DOJ with Regency Law School (pat robertson of the africa child labor gold mines) and others of that ilk who think that God's law comes first....I don't know which of God's laws they think supercede our laws, I am afraid to ask....they would think I was Satan's get.....

[mikala]

03:50 PM on 11/21/2011

This is exactly the crap that the Occupy movement is protesting against. How do you run a company into the ground then benefit from it. Greedy Pigs all of them!

[schatsie]

10:43 PM on 12/14/2011

What is really amazing is how they have corrupted the culture, from the boards of directors to the accounting firms, to the ratings agencies to their own staff.....

[Mister Grumpy]

11:45 AM on 11/21/2011

Just normal business practices of the 1%'ers. Keep voting Republican if you think these practices are okay.

[MtnGeek]

11:51 AM on 11/22/2011

He got his ... and everyone else will get laid off.

[mariusvinchi]

04:23 AM on 11/21/2011

Steal a hot dog, get 80 years in prison. Steal a few million, get a platinum watch, private jet and golden parachute....

[Your Mother]

09:53 AM on 11/21/2011

80 years for a hot dog. I'd like to know where you live so I can avoid it.

[mariusvinchi]

03:17 PM on 11/21/2011

http://www.wtsp.com/news/article/221469/58/Man-gets-80-years-for-buying-hot-dog-with-fake-money

[schatsie]

10:44 PM on 12/14/2011

Heck they used to hang the poor buggers, send them on starvation ships to Australia, cut off body parts, throw you in debtors prison....Read Dickens...warms your heart how far we have come......

[pinetrale]

08:26 PM on 11/20/2011

One reason stock dividends are so darn low is they so over-pay the ceo's of these companys and their management teams. Add up the top 10 managers of a big company, with their pay and stock options and perks and bonus's and you can readily see, what could be a good income stream to stock holders go up in smoke. Also these managers have a history of doing company financed stock buybacks to also reduce the float and leverage up the price increasing the value of theiir options. If you can get the price of a stock up a dollar and you hold 30,000 option shares, you just made a lot of capital gains tax level profits. A hired manager should'nt make more than several hundred to a couple of million a year period, and golden parachutes shouldn't be for more than 6 months compenstation tops. So I don't even buy shares in companys like HP that pay executive after short term executive huge multimillion dollar packages. But the practice is so endemic, and profitable, they have no shame or self restraint. Look what they payed the ex ceo of home depot after a couple year run, it was 200 million I believe and they did it as his golden parachute as things weren't working out.

[Pandoras Folly]

10:48 AM on 11/21/2011

Makes me want to start a company up....just so i can tank it.

AND MAKE A LOT MONEY DOING IT

[schatsie]

10:45 PM on 12/14/2011

Excellent comment....

[TrippLite]

05:57 PM on 11/20/2011

The writer works harder to attack CEO's than they did to actually tell the story. What were the expenses for?! Just an example, was it jet use, expensive dinners? I'm not saying that what happened is alright, I'm just saying this is shoddy, biased journalism if you can even call it that.

[shanti108]

03:01 PM on 11/21/2011

I'm not sure its biased, but it was certainly shoddy. I'm guessing laziness not bias. To have done the job properly would have required more than using Google to cut & paste a string of headlines together. The writer would have had to make some phone calls, ask questions, do some original research--you know, work.

[MtnGeek]

11:52 AM on 11/22/2011

You are blaming the journalist? Are you on the Friendly's Board of Directors?

[Tom95134]

04:37 PM on 11/20/2011

Let's hope that the Bankruptcy Trustee has the cajones to file fraud charges against this guy.

[schatsie]

10:48 PM on 12/14/2011

Let's hope Judge Rakoff hears the case....Let's hope some judge with cahones hears the case......

[separatingwheatfromchaff]

08:24 AM on 11/20/2011

Pretty much explains the birth of OWS.It's funny reading some of the wingnut comments justifying this behavior by CEO's when their usual comments are more along the lines of lambasting the poor for drawing unemployment and food stamps.

[schatsie]

10:50 PM on 12/14/2011

Did you read about that A---- judge who sent the woman to jail for 5 years after she paid back 5 grand in food stamps....she had to pay it back because of a minor conviction, not because of fraud due to not having the children or having too much in assets....In the meantime, those trust fund babies who never work a day in their pretty little lives like Paris Hilton are ENTITLED TO MEDICAID...... Medicaid for heavens sake.....

[jeromettaylor]

03:54 AM on 11/20/2011

If Mr. Agadi spent $5K/wk for airfare, hotel, meals and travel related expenses in an effort to attract investors, increase market share, improve quality and product offerings....that is exactly what any CEO should do.

That does not make Mr. Agadi guilty of stealing from the company.

[Harry Gonnella]

02:43 PM on 11/21/2011

Well, he spent only 3 or 4 days a week at Friendly's. The rest of his time was spent on non-Friendly's related businesses and personal affairs.

[MtnGeek]

11:53 AM on 11/22/2011

Even if the company could not fund those trips? There is some responsibility of the CEO to understand the finances of the company he is running and if those finances could not sustain his spending, he needed to change his habits or resign.

[webwzrd]

02:38 AM on 11/20/2011

Free Market Capitalism at it's best.

[TabaskoKat]

02:32 AM on 11/20/2011

sounds like a pretty good scam if you can get in on it

anyone ever wonder why most of the products for sale feel over priced and cheaply made. its because they are, so these animals can steal huge pay/benefit pakages at our expence. either because your the customer they rip off, or your the employee they steal from by paying the crappiest wage they are legally allowed.

its not accident that the miniumum wage has only been increased 2x's since the 80's

[pinetrale]

08:32 PM on 11/20/2011

yes I notice it all the time. These managers pocket way too much of the profit line and leave everyone else wanting unless you got in as an insider on the ride with a huge block of stock and sold near the top. They cut jobs, push productivity, cut and freeze wages, and put out the cheapest product possible realtive to wages in most cases unless they have true integrity. Its astounding to me the current class of managers, ceo's, cfo's, coo's and the top tier of their teams have inflated their take year after year like a graph line going up 45 degrees without fail.

[schatsie]

10:53 PM on 12/14/2011

Graef Christal was writing about it in the 1980s when it started to take off....funny thing, the more Reagan cut the tax rates, the greedier the CEOs became...coinkydence, I think not......

[Tom Derenze]

09:53 PM on 11/19/2011

I worked for an east coast bank in 2006 where the President was personally responsible for starting a car leasing business that lost $95MM. The following year he was let go and received a $6MM severance. Six months later the Bank laid off 3,000 people as a direct result of his efforts! Nice, huh!!

[userw014]

08:39 PM on 11/19/2011

Don't tax these CEOs! They're the job creating class! Especially Agadi - think of how many jobs he created law and accounting firms due to the bankruptcy of Friendly's.