Corporate America Rewards the Inept.

Let’s see. You have a job and you do it poorly. As a direct result of your decisions the company tanks, investors lose hundreds of millions of dollars and employees are laid off in droves. Now what would a person imagine would happen to you if you were this person. Don’t worry. In corporate America, you would not only keep your job but get a raise that is greater than the annual budgets of half the towns and cities in the country.

In a pair of absolutely appalling corporate board decisions, Lazard Ltd, and Countrywide Financial Group’s compensation boards decided to award the utterly anemic work of their two chief executive officers with incredible pay increases and bonuses.

In the case of Lazard, Bruce Wasserstein, the CEO and board chairman was given a new five-year contract that includes a minimum of $96.3 in stock. This is necessary since Wasserstein receives a paltry $900,000. a year in base salary.

The question demands an answer if Wasserstein should be given any monies and in fact should not be shown the door for his corporation’s horrendous slump in stock value.

Lazard has plummeted 31 percent in the last year under this man’s watch but all his good old boys on the board have not only protected him and his job but made a shameful showing of how corporate greed has no bounds. The almost laughable point is Lazard is an investment firm. That’s who I want handling my portfolio: An investment company that loses a third of its value and gives away another $100 million to the guy who was at the helm during the demise.

Not to be outdone, Countrywide Financial Corp has honored their CEO with salaries and stock options in the last four years totaling a staggering $387 million dollars. Angelo Mozillo, one of the geniuses who created the faulty sub-prime mortgage fiasco shied away from another $37.5 million in bonuses only after the public outrage of this bilking of stockholders hit the news. Mozillo was one of the bright individuals who thought loaning money for mortgages with no money down was a great idea. He also must have thought the prime rate would remain at zero ad infinitum since even a small movement would place monthly mortgage payments beyond the abilities of borrowers to repay.

One would think his being the captain of a sinking ship that has taken money from Arab interests just to remain solvent would be enough to get him fired. But not in America. Rather he was about to receive a hefty bonus until the news hit the fan and investors clamored for everyone’s head at Countrywide.

You won’t have to feel sorry for Mozillo. His company is in such a state of negative cash flow that it will be bought out by another company. Thus all those shares of stock he was given for being incompetent will net him perhaps another $400 million dollars.

It is hoped this will be enough to tide him over as he’s shown the door. The door to another company I’m afraid that will scratch his bank account as long as he scratches the boards of director’s bank accounts in return.

In the meantime, middle class investors wonder if there is anyone left they can trust with their money.

Personally, I recommend putting it under a mattress. You won’t make any interest but at least your principal won’t disappear into the bank account of another greedy, corporate CEO.