Part II - How to succeed in business while failing

I haven't posted recently as we moved two weeks ago and it's only two days ago that I got broadband access in our new flat. We'll it's just in time to write about the hearings that Rep. Henry Waxman of California conducted this past Friday on the exorbitant severance packages of failed Wall Street CEO's Stan O'Neil and Charles Prince.

Dear Representative Waxman:

I want to thank you for chairing the Committee on Oversight and Investigations hearings on the issue of high compensation of failed CEO’s. As a former employee of Merrill Lynch I have been closely following the story since last year, of the huge financial losses of Wall Street firms due to their reliance on collateralized debt obligations. I was almost despairing that there would be so little follow up to Stan O’Neal’s and Charles Prince’s spectacular failure in that regard while receiving exorbitant golden parachutes until I read the news accounts of your committee’s hearings. I am glad that you have helped to keep this outrage in the news and to not let it fade it away. Even though these gentlemen may not have committed any illegal acts we have yet to see the full awful consequences that their irresponsibility and recklessness may cause to our economy. It is a very lame excuse for a professional manager to claim that they didn’t see this debacle coming. Risk is always a concern for financial service firms and properly managing and hedging against it is the most important part of an executive’s fiduciary duties. The disparaging comments by your Republican colleagues, Darrell E. Issa and Tom Davis on why these hearings had to be held has reminded me of why I voted a straight Democratic ticket in 2006 (I’m a registered Democrat in Alpine, NJ but I am currently working in Wellington, New Zealand) and why I was so exultant in November of that year on learning of the Democratic Congressional victories.

In 2003 I was downsized from Merrill Lynch, along with thousands of others by Mr. O’Neal as part of a cost cutting move to increase the value of the firm’s stock. As a six year employee I received the company’s standard severance package: three months compensation with health benefits plus one month for every year above five years on the job. How can it be justified that a man who is responsible for a six billion dollar loss, the largest in Merrill Lynch’s history, then receives a severance package worth 141 million dollars? Thank you for asking this question in a public forum and God bless you.