Cantor Fitzgerald CEO Keeps His Word

ByABC News

Oct. 10, 2001 -- Two days after hijacked jets were slammed into the World Trade Center, Cantor Fitzgerald CEO Howard Lutnick was sobbing on national TV, pledging that his bond-trading firm would look after the families of the company's more than 700 victims.

The following day, he cut off the paychecks of those who were missing, angering many of the families by assuming their loved ones were dead. He then said he would sever the victims' health benefits by the end of September.

Now he tells ABCNEWS' Connie Chung that he is keeping his pledge to the victims' families. For the next five years, the company will set aside 25 percent of its profits for them. The funds will cover the families' health care costs for the next 10 years, with whatever is left over being equally distributed among the families in cash.

"We are going to be with these families for the very long term," said Lutnick, who was out of the office on the morning of Sept. 11 because he was taking his son to the first day of kindergarten. "No cap, no limit. The more we make, the more successful we can rebuild our company. We share it together."

If the company's profits were lower than expected over the five years, the company would keep making payments until each family had received at least $100,000, he said. Lutnick also said the company would pay out all bonuses and commissions owed to the victims by Thanksgiving.

Asked why he cut salaries after vowing to look after the families, Lutnick said, "It was the most difficult decision, because it wasn't a business decision or a personal decision. It was an everything decision."

Lutnick said he had two options: a short-term and a long-term one. "If we paid salaries to 733 people who were gone, and only had 300 people in the United States of America who were left, the company would not be there in the long run," he said. "Three hundred people in the United States can't pay 700 of their friends' and co-workers' salaries and stay in business."

Cutting Off Hope

But for some widows, it was about more than money. They said Lutnick cut off their spouses' salaries at a time when the families were still holding out hope that their loved ones were alive.

"I was disgusted," said Ann Wodenshek, who lost her husband in the Sept. 11 attack. "I didn't accept he was dead at that point. He was missing … They could give us at least two weeks to grieve without having to think that our husbands were gone."

Susan Sliwack, who lost her husband Robert and has three children to support, said, "Howard Lutnick is not the man that's going to tell me my husband is dead. That's not how I want to find out, on TV with the rest of the world."

According to Sliwack, Lutnick "never treated anyone kindly in the firm" and "was not liked by the company."

Other widows suggested that Lutnick was trying to gain sympathy by sobbing on national TV, or possibly attempting to attract business.

"He should have gotten a great award for his performance that day," said Lynda Scarcella-Fiori, whose husband, a Cantor employee, died in the attack.

Lutnick is aware of the widows' criticisms, but said he does not hold anyone accountable for their harsh words because he knows they are in pain.

"I don't blame anyone who lost a family member for what they say," he said. "They all got an absolute pass for anything they say and anything they do."

'Aggressive, Ambitious, Ruthless'

Investigative reporter Tom Jaffe, who wrote about Lutnick for Forbes magazine, said he was not surprised by Lutnick's response after the attack.

"Lutnick is regarded as aggressive, ambitious, ruthless and willing to step on or over anyone in order to get what he wants," said Jaffe, who covered Lutnick's takeover of the company from his dying mentor, Bernie Cantor, and his subsequent court battle with Cantor's window over control of the company.

Whether Lutnick backed himself into a corner with his initial promises, or simply needed time to work out the details, Kathy Faughnan, whose husband was killed, is willing to give the CEO the chance to do the right thing.

"I'm only hoping that he does what he would do for his own family to the best of the company's ability," said Faughnan, who is now raising three children on her own. "I wouldn't want the company to go out of business because then nobody gets helped."

Lutnick, who is grieving over the loss of his own brother in the attack, added: "When you take away all the people whose shoulders a CEO stands on, the CEO is just a person. I am just a person who lost my brother, who is doing everything that I can to stay and deliver exactly what I said," said Lutnick.

Written for by Rebecca Raphael.

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