Opinion

Felix Salmon

Larry Summers’s millions

By Felix Salmon
April 4, 2009

Larry Summers made a lot of money last year, and boy is it voyeuristically impossible to resist looking through his disclosure to see who paid him what. The really big money, unsurprisingly, came from DE Shaw: a salary of $1,432,497 (weird amount, that), along with partnership distributions of $3,756,126, for a total of $5,188,623. But just because he was earning $100,000 a week from DE Shaw doesn’t mean he wasn’t earning lots of money elsewhere, too: his speaking engagements alone came to another $2.8 million or so.

Of particular interest to me is the amount that Nouriel Roubini was paying Summers to sit on the advisory board of Roubini Global Economics, where I used to work: $147,500 a year. Somehow I doubt that fellow board member Marc Uzan was pulling down a similar amount.

But Summers’s speeches are interesting too, especially the foreign ones: $67,500 from Tata Conultancy Services; $90,000 from the Asociation de Bancos de Mexico; $103,500 from the Universidad Autonoma del Estado de Baja California; $112,500 from Centro de Liderazgo y Gestion in Colombia; the same amount from IESE Business School in Spain; $135,000 from the American Chamber of Commerce in Argentina; and a whopping $225,000 from Leaders and Company, the publishers of This Day newspaper in Nigeria.

Is Larry Summers the only person in history to reply to an email from Nigeria saying “we have hundreds of thousands of dollars we would like to give you; you need to do very little to receive it” — and actually get the money?

What’s sure is that Summers has made so much money during his time in the private sector that he can easily afford to spend the foreseeable future in public service, should he be so inclined: you don’t need to make $8 million a year for very many years before your net worth becomes so large that money simply ceases to matter any more. After all, it’s not like he’s spending it all on clothes.

Update: The NYT adds that Summers earned his $5.2 million from DE Shaw working just one day a week.

Comments
8 comments so far | RSS Comments RSS

Big deal (pun not necessarily intended). Larry probably
got the money so he could afford tickets to games
in the new Yankee $$$tadium.

btw — have suggested on my website that we find out
what is being taught in B-schools today ( that Henry F. Potter is the hero of “It’s a Wonderful Life”?); that establishment of chapters of a new organization — Aggrandizers Anonymous –
would be helpful; and that we pay attention to the first half of Federalist 57 which, iin the opening sentence,
takes note of those who seek the “ambitious sacrifice of the many to the aggrandizement of the few,” and recommends that our leaders stay close to the people and serve the common good.

I guess I don’t have to (but will) acknowledge that no one pays attention. But, then, for all our technological inventiveness, we probably don’t have to worry that ours will be known to history as “The Age of Common Sense.”

 

felix — I am pretty sure that Summers wasn’t paid for being on the RGE advisory board, but rather was an equity investor in RGE who sold his stake for a profit.

Posted by bsetser | Report as abusive
 

though the disclosure is pretty clear. advisory board compensation; guess i was wrong.

Posted by bsetser | Report as abusive
 

Actually, Brad, that’s a separate line item: he made a “gain on disposition” of his equity stake of somewhere between $15,001 and $50,000.

Posted by Felix Salmon | Report as abusive
 

Felix, thanks for the reassurance that we can have Larry in public service for as long as he chooses. Which “public” do you think he will now choose to serve? The one that is paying him an ES-1 salary of $186,600 or the one that paid him previously? As Herb Cohen has said, “it’s not the money, it’s THE MONEY.” Personally, I hope Larry goes back to THE MONEY sooner rather than later.

Posted by maynardGkeynes | Report as abusive
 

Well, at least Larry has the first hand experience
needed to talk with his boss about executive
compensation and related issues of importance
to fix the global imbalances that have the economy
in a pickle.

Posted by Cerri | Report as abusive
 

One must honor contracts. I did not realize delayed gratification ment get paid first and deliver the goods when you join the next admin.

Posted by tyaresun | Report as abusive
 

Dan Zuckerman said it: No one’s listening (no one pays attention.)

The metaphor is apt.

People BUY attention and advertisers PAY (for)attention.

Attention goes to those who can buy best PR.

Then again, there are various centers of power that are independent of money such as the government, academia and the military.

Is anyone paying attention to (reading) this?

 

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