William Cohan makes a good point in the FT:
If it weren’t for the taxpayer, it’s not just Morgan Stanley, Goldman Sachs, and Bank of America that would have gone bust. The sitting CEOs of all three firms might have gone bust, too!
(OK, not “bust.” They’ve presumably stashed some money in something besides their firms’ stocks. But at least “kablooey.”)
Because if taxpayers hadn’t bailed out those firms, they would have rolled belly-up like Lehman. And if they had rolled belly-up like Lehman, their stocks would have gone, effectively, to zero. Which would have cost Ken Lewis, Lloyd Blankfein, and John Mack a boatload.
Let us not forget that Dick Fuld, whose main distinguishing feature from other Wall Street CEOs is that he did not get a bailout, lost $1 billion on Lehman stock. $1 billion! And it’s still gone! (Unless he’s held on to the worthless piece of paper that traders are bidding up in the current euphoria).
For John Mack, Ken Lewis, and Lloyd Blankfein, however, it’s a different story.
Here’s how much money John, Ken, and Lloyd have of their own very-not-worthless stocks:
- Mr Blankfein: $623 million
- Mr Mack: $125 million
- Mr Lewis: $83 million
Jamie Dimon also owns $500 million of JP Morgan, but we’re not convinced JP would have gone bust (though Jamie’s holdings are certainly padded by winnings from the Bear Stearns bailout).
Almost every penny of the fortunes above was a direct gift from the taxpayer to the respective CEO.
Would it be too much to ask them to say “thank you”?
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