Ken Lewis, the soon-to-be “ex” CEO of Bank of America, won’t suffer too much after his departure from the financial giant. In fact, Lewis will likely receive a $125 million severance package—including $53.2 million in retirement benefits and $72.8 million in accumulated stock and other compensation.
Bank of America was one of several failing banks “bailed out” by federal TARP funds—Bank of America received $45 billion, actually. Nevertheless, Lewis won’t feel the pain of the bank’s failings, unless Kenneth Feinberg, the federal government’s payout czar, does something to stop him from getting the severance money.
This isn’t very likely, though. Lewis’ severance package contract was apparently in place prior to Bank of America taking the TARP funds. Therefore, the federal government is feeling uneasy about interfering with a contract. They argue: if we null and void this contract, where does the government’s interference end? But the question I pose is: doesn’t it change the terms of a compensation agreement between a Wall Street firm and an employee if that same financial institution is taking federal money just to stay afloat?
The whole situation seems more than a little unfair. Once again, it seems that the government is treading too lightly in an arena where the shareholders continue to get the short end of the stick, and the rich CEOS are awarded for less-than-mediocre performance.
recently named in the 2009 edition of Best Lawyer's In America, David Mittleman has been representing seriously injured people since 1985. A partner with Church Wyble PC—a division of Grewal Law PLLC—Mr. Mittleman and his partners focus on medical malpractice, wrongful death, car accidents, slip and falls, nursing home injury, pharmacy/pharmacist negligence and disability claims.