Nov. 13, 2008— -- In the midst of a crumbling economy and tight credit markets, one of the financial world's most storied brokerage firms collapsed. Now, that firm's infamous CEO has taken another public hit -– this time in the slumping art market.
At a sale Wednesday night at New York's Christie's auction house, 16 post-war drawings owned by Lehman Brothers chief executive Richard Fuld and his wife Kathy were sold separately for just over $13.5 million. Christie's had initially estimated the collection would sell for between $15 million to $20 million total.
The relatively lackluster results for the Fulds' sales -– which included three drawings that sold for more than $2 million –- matched much of the rest of the auction. Though hundreds packed the Christie's showroom, bidders weren't too quick with their paddles: More than half of the 75 pieces on the block Wednesday night failed to meet their auction targets, Christie's officials said.
Amy Cappellazzo, the International Co-Head of Post-War and Contemporary Art at the auction house, said that, given the current financial crisis, she was thrilled that people showed up to buy art at all.
"It would be really unreasonable to think that we would be immune," to the financial markets' misery, she said.
The sale comes a week after Lehman Brothers -– which is now largely owned by the U.K. financial firm Barclay's -– announced that Fuld would be stepping down as Lehman's chief by the end of the year. Fuld, through a spokesman, declined a request for an interview. Kathy Fuld did not respond to a request for an interview.
Kathy Fuld, who is a trustee at the Museum of Modern Art, told the New York Times that the sale of the drawings was unrelated to Lehman's woes.
"I've been selling things for the past few years, but nobody cared until now," she told the newspaper.
How much the Fulds will actually care that the collection sold for millions less than expected, remains to be seen: Though Fuld will be out of a job soon, he's still due for a six-figure payday. While a spokesman said that Fuld will not claim any severance or bonus when he departs Lehman, according to David Schmidt, a senior consultant at the compensation consulting firm James F. Reda & Associates, Fuld will receive a pension of approximately $759,000.
Fuld collected $10,900,000 in base salary and $77,475,000 in cash bonuses during his 14 years as Lehman's chief. Most recently, he also reaped $539,909 from the sale of more than 2.5 million Lehman shares in September, according to Equilar, Inc., an executive compensation research firm and data provider. As of Sept. 23, Fuld still held at least $7,978 in Lehman shares.
The cash he made on his stock sales, however, was only a fraction of what Fuld could have earned had he sold earlier: in January, Fuld's holdings in Lehman were valued at over $695 million.
The Christie's auction Wednesday night, with its refined setting and calmly seated audience, contrasted sharply with Fuld's last public brush with art.
On the day that Lehman announced it was seeking bankruptcy protection, artist Geoffrey Raymond -- known for painting Wall Street heavyweights and politicians -- debuted a large portrait of Fuld outside Lehman's Times Square headquarters. As he's done with other works, Raymond invited passersby, including Lehman employees, to use colored markers to sign messages on the canvas.
Green -- Lehman's official color -- was reserved for use by Lehman workers and their families; black and blue were for everyone else. Today, more than a third of the scribbles on the portrait are in green. Among the green messages, presumably directed at Fuld: "25,000 unemployed; I hope you are happy," "Your employees bled green for you," "You are a coward," and "You broke our heart."
Other messages were less polite, including some crude interpretations of Fuld's first name.
At a congressional hearing on the financial crisis last month, Fuld said he took "full responsibility" for the bankruptcy of Lehman Brothers and "felt horrible" about it.
"This is a pain," he said, "that will stay with me the rest of my life."