Time For Bank CEOs Who Blew It To Step Down

As the financial services train-wreck continues, CEOs are getting better at saying they feel shareholders' pain. But actions speak louder than words, and it's time some of these folks acknowledged where the buck really stops -- in actions, not words.

CEOs are happy to accept responsibility -- and fortunes in annual compensation -- when times are good. Thus far, however, unless forcefully shown the doors, they seem to show no willingness to accept real responsibility when things go bad.

If CEOs get rewarded when companies like Washington Mutual, Citigroup (C), Wachovia, UBS, Merrill Lynch (MER), Morgan Stanley, GE (GE), Bear Stearns (BSC), et al, gamble and win -- and, boy, do they get rewarded -- then they should get punished when the same gambles lose. And don't think for a second that "unprecedented market disruption" these folks blame for recent losses is actually the cause of the tens of billions they have vaporized. The cause is and was risky bets that went bad.

Instead of saying he was "deeply disappointed" with Wachovia's disastrous first quarter, in other words, Wachovia CEO Ken Thompson should have said he was deeply disappointed, accepted full responsibility, and tendered his resignation. Why? Not because Ken actually made the bets that blew Wachovia's capital to smithereens, forcing it to raise $7 billion in emergency capital. Because Ken is responsible for those bets, and because accepting that responsibility with actions, not words, is the right thing to do.

The world won't change if today's bank CEOs resign -- the new senior executives will still take credit in good times and blame "market forces" in the bad time. But at least some high-profile people will lead by example and do what too many Americans don't: accept full responsibility for their decisions.

See Also: Pathetic GE: Blame Bear Stearns For Our Mess

Comments

[glitzqueen]

Axing them is appropriate, yes -- but then they leave with tens of millions. That oughta stop, too.

And what about prosecuting those who knowingly created this mess, for their own gain -- from the Wall Streeters peddling pixie dust to the rating agencies that gave it their imprimatur down to the mortgage brokers and appraisers?

[elpollo]

Well, losing that kind of money is a definite loss of honor. The Japanese Samarai knew how to deal with loss of honor. And it wasn't a Chicago Cubs announcer either. This is the correct egress for these CEO's. Maybe we could put it on youtube. And let the board of directors personally clean up the entrails. Nothing like a little downside risk for these bastards.

[Rule Of Law]

Remember the poor little Frenchman who lost those billions for his trading company? Think he got a golden parachute, or a golden shower?

[americaforme]

To acknowledge them in any way defeats all sane developements. Go silently into obscure lonley places where they can watch the usury pain globaly. Let them beg for human kindness like the poor will starve, for this get rich quick greed scheem. The financials continue, as though nothing has happened, thats what slays me. We seem bound to bank task masters, like the Jews in Egypt,making bricks without staw. Slavery to debt load, with know hope of future feedom. Why do we succomb, to this debt sentence? We need our infusion, in share, as the banks are bailed out. Who said; WE THE PEOPLE haven't the rights of banking systems. Let the mega bucks ceo's spend their years in obsurity shunned by patriot Americans.

[Bobotheclown]

Corporate criminals survive because they have the political will to fight for their special interests. They are united, politically connected, and wealthy. The people in Congress who must choose between them and the unfocused 'will of the people" are in a very bad position today. They know that there is no "people's movement for justice" out there. At most there are a few liberal action committees that run a few web sites and perhaps post a few comments on web venting sites such as this one. But in the end the peoples representatives will fade and the CEO's representatives will still be there. If a Congressman wants a career it is clear how he must play the game.

If the people who post on this web site dedicated just 10% of the time they spend venting on organizing, creating grass roots voting blocks, and lobbying, they could take back some of the economic power they so emotionally complain about.

The problem is not greedy CEO's. The problem is lazy citizens who will not fight them.

[ez14livin]

You all are talking about honor among theives...

[andyboy]

Blame and accountability are very politically incorrect these days.

Henry, didn't you know it was a "perfect storm" and nobody could have seen this coming?

It was just one of those things. Real patriotic Americans don't get bitter about stuff like this.

Do you pray or perhaps hunt?

[Effyoo]

Henry,
As always, your comments are insightful and honest. Thank you for saying (as always) what we are all thinking but sometimes lack the courage to say.

KEEP YOUR BLOGS COMING!!!!!

[dadw5boys]

JUSTIFY THE STOCK OPTIONSGIVEN OR TAKEN FOR DURING THIS PERIOD.

HOW DID THEY EARN THE BONUSES AND HOW DID THEY FIGURE THEM BASED ON WHAT???

[Pneumaticus]

Step down and forfeit!

[paixa3]

...and if lawbreakers, go to court and maybe prison too.....justice is what the USA needs badly at this time.

[SCG]

Can the economy handle all the costs in terms of golden parachutes? It might be cheaper to keep them?

[HowietheScreamer]

Termination for Cause rarely triggers a golden parachute.

[LeftRight]

It does if you're a CEO of a major corporation since the 80s!!

[ErnestineBass]

So.

Greed is NOT good, eh, Henry?

[WIpatriot]

No, dear, it's good when profit is being made, otherwise it's not so good.

[Podewumun]

Henry's got a lack of accountability skeleton or two of his own in the closet. Look it up.

[Bobotheclown]

Can you hear yourselves? You're talking about a corporate employee who has willfully mismanged shareholder money in a blantant attempt to manipulate share price for his own gain... to consider stepping down.

The cowardice of the American business community has no bounds. Every other corporate employee is bound by law and does not have the luxury of stepping down. They will be prosecuted for these crimes. But decades of pro-business/anti-consumer lawmaking has put CEO's above the law and they are only doing what is permissable (and expected, and demanded by their CEO peers) when they act irresponsibly. But those laws were made by an elected Congress with the permission of the masses who are now being robbed.

So don't blame the CEO's. Robbing is just their nature. Blame the people responsible: the American voter who allowed it to happen. When they want the CEO's to "step down" they can make it happen instantly.

[Economike]

Isn't that like blaming the rape victim for being raped.

[Podewumun]

INSTANTLY, my arse! It took me and my fellow Home Depot shareholders THREE YEARS to get rid of that idiot Robert Nardelli, and when we finally did, he walked off with over $200 million and a cushy new job as CEO of Chrysler. These guys are harder to kill off than cockroaches.

[paixa3]

If they EVER get the balls to get rid of incumbent trash in congres.....about 98% of them.....

[libmatters]

Tax golden parachutes at 95%. There's no reason for golden parachutes for executives when they screw up. Stan O'Neal got over $160 million to walk away from the mess he made at Merrill Lynch.

[ForRichardorPoorer]

Very good post.