"How much should a Wall Street CEO get paid?" The question got bandied around on Thursday night at dinner -- by a bunch of Wall Street CEOs.
The question was the topic of the day following coverage of the extravagant ways of John Thain, former CEO of Merrill Lynch, who spent $1.2 million on his office furnishings: $28,000 on curtains, $10,967 on a lampshade, $1,400 for a waste-paper bin, $88,000 for a rug and so on. Media speculation centered on a $35,000 commode -- until it was pointed out that the commode was a cupboard.
Still, people were furious with Thain, who had sold Merrill to Bank of America in September without telling BoA's chief Ken Lewis about nearly $15 billion of losses on his balance sheet or that he planned to push through billions in bonuses to his Merrill staff, unusually -- ergo surreptitiously -- before the end of the year. All this was to be paid for, in part, by the government bail-out money given to the merged bank. In retrospect, no wonder that a few months ago he was the only CEO on Wall Street with the gall to ask for a $10 million bonus at a time when the government was dolling out survival packages.
The man is clearly completely oblivious of the times. He needs to rewind Obama's inauguration address and listen over and over to the part about greed and excess.
Thain's extravagance has not only cost jobs but poor Lewis has had to go back to the Treasury, cap in hand, to beg for more taxpayers' money -- $138 billion, to be precise.
So when the CEOs at dinner started knocking around speculative figures and one ventured: "$15 million maybe?" I decided to speak up on behalf of taxpayers, now bank owners.
"You guys are speaking vernacular that is PS [pre-socialization]. You have to stop. Let's assume you don't pay yourselves anything until you actually start making profits that pay me back -- the person who has subsidised your $80,000 carpet." There was silence and head-scratching and muttering that maybe I was right.
And since we are talking about $80,000 carpets I have a new idea for anyone who runs a bank or firm subsidized by government money. Office photos should be mandatory and publicly displayed so we can be sure our taxes aren't subsidizing photo-shoots for interior decor magazines.
This article was originally published by the London Evening Standard