Ken Lewis’s symbolic pay cut

By Felix Salmon
October 16, 2009
cut to Ken Lewis's 2009 payout:

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I love the fact that Kenneth Feinberg has made his largely symbolic cut to Ken Lewis’s 2009 payout:

At U.S. pay czar Kenneth Feinberg’s request, Lewis will not receive the $1.5 million salary he was slated to make this year, company spokesman Bob Stickler on Thursday. Lewis will not receive a bonus or any other payments for 2009…

A breakdown of Lewis’s outgoing compensation shows that he is expecting about $53 million of pension benefits from an account frozen years ago and another $72 million of accrued and deferred stock compensation.

Obviously, money is fungible, and Lewis’s $1.5 million in salary was just going to be the cherry on top of the other $125 million he’s managing to walk home with upon departing BofA. Since Feinberg had no real jurisdiction over the big lump sum due Lewis, he just decided to bring the sum he could control down to zero.

Lewis clearly isn’t running BofA well — in the current interest-rate environment, it’s actually really quite difficult for a bank to have racked up a billion-dollar loss last quarter, even after $2.2 billion in Merrill Lynch profits. Any pay that Lewis gets is not going to be for performance.

On the other hand, BofA’s loss, coming as it does on the heels of similar results at Citigroup, shows that times remain very tough in the real world west of the Hudson River. And that’s something the stock-market bulls, and the Goldman Sachs plutocrats, would do well to remember.

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