The president of the largest steel company,Charles Schwab, died a bankrupt man; the president of the largest utility company, Samuel Insull, died penniless; the president of the largest gas company, Howard Hobson, suffered a mental breakdown, ending up in an insane asylum; the president of the New York Stock Exchange, Richard Whitney, had just been released from prison; the bank president, Leon Fraser, had taken his own life; the wheat speculator, Arthur Cutten, died penniless; the head of the world’s greatest monopoly, Ivar Krueger the “match king”, also had taken his life; and the member of President Harding’s cabinet, Albert Fall, had just been given a pardon from prison so that he could die at home.
Unfortunately, not all of it is completely accurate, but the lessons remain the same: It’s better to have been a speculator for a moment than a spectator for a lifetime. Or possibly something about how success is fleeting and maybe it’s not so great at the top, I don’t know; I have difficulty learning from others’ mistakes.
I doubt we’ll be seeing any present-day riches-to-rags stories though. These days, any ousted execs (short of blatant criminals) leave with quite the golden parachute. Let’s look at what happened to the bank execs who were kicked out in the wake of the 2007 financial crisis:
Merrill Lynch’s chairman Stan O’Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs. In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.
And Ken Lewis of BoA departed in 2009 with a $53 million pension package.
It’s still early though. Who knows, they might very well all commit suicide in an untimely manner.
Wall Street banks in $70bn staff payout –Guardian UK