In the first Congressional hearing into the financial crisis, the former CEO of the bankrupt Lehman Brothers, Richard Fuld, became the poster boy for Wall Street greed today as he defended the $484 million he received in salary, bonuses and stock options since 2000.
"Is that fair?" asked committee chairman Rep. Henry Waxman (D-CA) who pointed out Fuld owns a mansion in Greenwich, Connecticut, an ocean front estate on Jupiter Island, Florida, a ski chalet in Idaho and a Manhattan apartment.
"If you haven't discovered your role, you're the villain today," said Rep. John Mica (R-FL).
Fuld said given the collapse of Lehman Brothers and its now worthless stock, his actual holdings were closer to $350 million.
"That's still a lot of money," he told the hearing.
Fuld said he took "full responsibility" for the bankruptcy of Lehman Brothers and "felt horrible" about it.
But Fuld said he has yet to understand why the federal government helped to bail out the AIG insurance company and other investment banking firms, but did not do so a few days earlier to save Lehman Brothers.
"Until the day they put me in the ground, I will wonder," Fuld told the Congressional panel, seeming to seethe with anger.
"This is a pain that will stay with me the rest of my life."
In his opening remarks, Waxman lambasted both Fuld and Lehman.
Internal documents obtained by the committee, Waxman said, "portray a company in which there was no accountability for failure."
Waxman cited an e-mail exchange among top Lehman executives. After someone sent an e-mail suggesting that Lehman's top management give up their bonuses, both Fuld and George H. Walker, a member of Lehman's executive committee and a cousin of President Bush, sent e-mails disagreeing with the suggestion.
Walker, according to Waxman, replied by writing, "Sorry team. I'm not sure what's in the water at 605 Third Avenue today. … I'm embarrassed and I apologize."
Waxman said that Fuld "mocked" the suggestion by adding, "Don't worry – they are only people who think about their own pockets."
Waxman also cited a request submitted to Lehman's compensation committee four days before the firm filed for bankruptcy. The request, he said, recommended that the board give three departing executives over $20 million in "special payments."
"In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman said.
Despite warnings that "liquidity can disappear quite fast," Fuld "depleted Lehman's capital reserves by over $10 billion through year-end bonuses, stock buybacks, and dividend payments," Waxman said.
Others at the hearing voiced their own concerns about compensation at Lehman.
Nell Minow, the editor of the research firm, The Corporate Library, highlighted Fuld's compensation, which exceeded $70 million last year.
"I think it is fair to say by any standard of measurement that this pay plan is as uncorrelated to performance as it is possible to be," she said.
Minow also found fault with Lehman's corporate board. The Corporate Library grades the performance of corporate boards and last month, Minow said, the firm downgraded Lehman's board to an "F."