The largest bankruptcy in U.S. history was preceded by handing out what could be unprecedentedly high paychecks, court documents show.
The collapse of Lehman Brothers in 2008, which became a symbol of the financial failings of the era, was preceded by paychecks totaling $700 million to just 50 of the firm's top executives, the Los Angeles Times reported Friday.
The sums out paid at Lehman Brothers were staggering, said executive compensation export Brian Foley in White Plains, N.Y.
"This wasn't a matter of five or six people being paid a lot," Foley said.
"Many people are going to be stunned at how well some people were being paid."
It is not clear yet how much of the pay was in stock options that were cashed in before the firm collapsed or how much was converted to ready cash before the fall of the Wall Street giant.
But on paper, by any measure, the sums are sky-high.
In 2007, former Managing Director Robert Millard's pay on paper was $51.3 million. Former money manager Marvin Schwartz was to receive $31.1 million and trader Jonathan Hoffman $30.9 million, the Times said.
Millard's pay was even higher than former Lehman Brothers Chief Executive Officer Richard Fuld, who was promised $40 million.
Given the fall of the company, the payments may appear inexplicable to people who believe high pay usually goes along with success, not the other way around.
In 2005, Millard was paid $3.8 million. His pay the following year soared to $44.5 million.
Millard now says he did not receive his entire pay package for 2006 or 2007 and that more than 50 percent of his Lehman Brothers pay was wiped out when the firm went into bankruptcy. (c) UPI
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