Common Sense?

Read the article by Solomon and Fitzpatrick on the front page of the WSJ today. The main topic is the pay "Czar's" (Kenneth Fienberg) removal of Ken Lewis' 2009 pay. The story also points out that Mr. Lewis will recieve almost $70 million in retirement benefits (read cash). This does not take into account what Mr. Lewis has already received from BofA. The article further discusses Stan O'Neal's receipt of $161.5 million when he left Merrill Lynch. Mr. O'Neal and Mr. Lewis pulled a combined $231.5 million in capital out of Bank of America over the last year. It would take $2.7 billion in revenue at 8.5% to create enough income to cover their compensation.

Several parties chime in that Kenneth Fienberg is "overreaching" and is "punitive". How much common sense does it take to stay away from the position that the two gentlemen actually earned their payouts?

I will take the position that neither of these gentlemen added the value they pulled out of the organizations they allegedly led. I further take the position that the supporters of Mr. Lewis and Mr. O'Neal enhance the view of congress and the American public that Wall Street is out of touch. If I were in Mr. Feinberg's position I would appoint an external party to evaluate just how much value either of these gentlemen added to their orgnazations during their tenure. If they did add value then certainly an equitable compensation can be arrived at for their tenure. If no value was added, then gentlemen - please jump on board the reality train with the rest of us.

Common sense tells us that if they added value, then they would not have needed a bail out - Ask Jamie Dimon. If you think JP Morgan Chase was bailed out then read Mr. Dimon's opinion on that. (http://www.chicagotribune.com/business/columnists/chi-mon-burns-dimon-0824-aug24,0,6678002.column) You can also look at JP Morgan Chase's stock performance over the last year vs. its peers.