AP study finds $1.6B went to bailed-out bank execs

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Madoff scandal and Ponzi scheme

Bernard Madoff, founder and president of Bernard Madoff Investment Securities, a market-maker for hedge funds and banks, was charged by federal prosecutors in a $50 billion fraud at his advisory business.

Madoff, 70, was arrested today at 8:30 a.m. by the FBI and appeared before U.S. Magistrate Judge Douglas Eaton in Manhattan federal court. Charged in a criminal complaint with a single count of securities fraud, he was granted release on a $10 million bond guaranteed by his wife and secured by his apartment. Madoff’s wife was present in the courtroom.

"It’s all just one big lie," Madoff told his employees on Dec. 10, according to a statement by prosecutors. The firm, Madoff allegedly said, is "basically, a giant Ponzi scheme." He was also sued by the Securities and Exchange Commission.

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Ponzi scheme

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business. It is named after Charles Ponzi. The term "Ponzi scheme" is used primarily in the United States, while other English-speaking countries do not distinguish in colloquial speech between this scheme and other forms of pyramid scheme.

Enron, Lay, Skilling

The trial began January 30, 2006

• Eight former Enron executives testified, the star witness being Andrew Fastow, against Lay and Skilling, their former employers.
• The jury reached its verdict on May 25, 2006, convicting both Lay and Skilling. Lay was also convicted by Sim Lake of charges in a separate bench trial.
• Lay died on July 5, 2006, and his convictions were thrown out on October 17, 2006.
• Sentencing of Skilling took place on October 23, 2006.
• Skilling was convicted of 19 of 28 counts of securities fraud and wire fraud and acquitted on the remaining nine, including charges of insider trading. He was sentenced to 24 years, 4 months in prison, and cannot be released before serving less than 20 years, 4 months. In addition, he must pay $630 million to the government, which includes a $180 million fine.
• Lay was convicted of all six counts of securities and wire fraud for which he had been tried, and could have faced a total sentence of up to 45 years in prison; however, he died of a heart attack on July 5, 2006, prior to sentencing. Accordingly, the judge vacated Lay's conviction on October 17, 2006, since he died before he was sentenced.
• Sixteen people pleaded guilty for crimes committed at the company, and five others, including four former Merrill Lynch employees, were found guilty at trial.

Yahoo Jerry Yang to Step Down

In a memorandum sent to the company’s staff Monday evening, Mr. Yang, 40, said he would hold the post until the board names his successor, a process he said he would participate in. The Yahoo co-founder said he would then return to his previous job as “chief Yahoo,” a corporate strategy role, and would remain on the board.

Warren Buffett

Warren Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the world's most successful investors and the largest shareholder and CEO of Berkshire Hathaway. He was ranked by Forbes as the richest man in the world during the first half of 2008, with an estimated net worth of $62.3 billion.

Often called the "Oracle of Omaha", Buffett is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies. When Buffett spent $9.7 million of Berkshire's funds on a business jet in 1989, he jokingly named it "The Indefensible" because of his past criticisms of such purchases by other CEOs. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500 and today, it is valued at around $700,000.

Buffett also is a notable philanthropist. In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation. In 2007, he was listed among Time's 100 Most Influential People in The World. He also serves as a member of the board of trustees at Grinnell College.

John D. Rockfeller - Standard Oil

John Davison Rockefeller (July 8, 1839 – May 23, 1937) was an American industrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and ran it until he officially retired in 1897. Standard Oil began as an Ohio partnership formed by John D. Rockefeller, his brother William Rockefeller, Henry Flagler, chemist Samuel Andrews, and a silent partner Stephen V. Harkness. Rockefeller kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first American billionaire, and is often regarded as the richest person in history.

Standard Oil was convicted in Federal Court of monopolistic practices and broken up in 1911. Rockefeller spent the last 40 years of his life in retirement. His fortune was mainly used to create the modern systematic approach of targeted philanthropy with foundations that had a major effect on medicine, education, and scientific research.

His foundations pioneered the development of medical research, and were instrumental in the eradication of hookworm and yellow fever. He is also the founder of both The University of Chicago and Rockefeller University. He was a devoted Northern Baptist and supported many church-based institutions throughout his life. Rockefeller adhered to total abstinence from alcohol and tobacco throughout his life.

He married Laura Celestia ("Cettie") Spelman in 1864. They had four daughters and one son; John D. Rockefeller, Jr. "Junior" was largely entrusted with the supervision of the foundations.

Paul Newman, actor and business owner

Paul Leonard Newman (January 26, 1925 – September 26, 2008) was an Academy Award–winning and seven-time Academy Award–nominated American actor, film director, entrepreneur, humanitarian and auto racing enthusiast. He won numerous awards, including an Academy Award for his performance in the 1986 Martin Scorsese film The Color of Money, three Golden Globe Awards, a BAFTA Award, a Screen Actors Guild Award, a Cannes Film Festival Award, an Emmy award, and many honorary awards. He also won several national championships as a driver in Sports Car Club of America road racing, and his race teams won several championships in open wheel IndyCar racing.

Newman was a co-founder of Newman's Own, a food company from which Newman donated all post-tax profits and royalties to charity. As of October 2008, these donations had exceeded US $250 million.

On September 26, 2008, Newman died at his longtime home in Westport, Connecticut, of complications arising from lung cancer.

Formosa Plastics Founder Wang, Taiwan's Second Richest, Dies

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Oct. 16 (Bloomberg) -- Wang Yung-ching, the son of a tea farmer who transformed a small rice store into Taiwan's largest industrial group, has died.

Wang passed away in his sleep in the U.S. yesterday, Formosa Plastics Corp., his flagship company, said in a stock exchange filing today. Wang, who turned 91 in January, was Taiwan's second-richest person with a net worth of $6.8 billion.

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Associated Press

Taiwan business tycoon Wang Yung-ching dies

updated 7:32 a.m. PT, Thurs., Oct. 16, 2008

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The China Post

President Ma extends condolences to Wang Yung-ching's family

October 16, 2008

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Japan Today

Taiwanese tycoon Wang Yung-ching dies

October 16, 2008

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Xinhua

TAIPEI, Oct. 16 (Xinhua) -- Wang Yung-ching, founder of Taiwan's Formosa Plastics Group, has died in the United States, the group announced here on Thursday.

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Business Week article in August 2008

"Though Taiwan's top industrialist Wang Yung-ching finally handed over to his son the reins of the sprawling petrochemical company Formosa Plastics in 2006, 91-year-old Wang still calls the shots behind the scenes. In July, he braved the blistering heat in Ha Tinh province in northern Vietnam for the ground-breaking ceremony of an $8 billion steel complex that Formosa is building. Wang's is a classic rags-to-riches story: the son of a Taiwanese tea farmer, he started selling rice at 9 years old. Known for his excessive frugality, he considered hot showers an unnecessary luxury until he was well into his 80s."

Lehman Brothers

Lehman Brothers Holdings Inc. was a global financial-services firm prior to its bankruptcy and sale in 2008. The firm did business in investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking. It was a primary dealer in the U.S. Treasury securities market. Its primary subsidiaries included Lehman Brothers Inc., Neuberger Berman Inc., Aurora Loan Services, Inc., SIB Mortgage Corporation, Lehman Brothers Bank, FSB, Eagle Energy Partners, and the Crossroads Group. The firm's worldwide headquarters were in New York City, with regional headquarters in London and Tokyo, as well as offices located throughout the world.

On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection; the filing marks the largest bankruptcy in U.S. history. The following day, Barclays plc announced its agreement to purchase, subject to regulatory approval, Lehman's North American investment-banking and trading divisions along with its New York headquarters building. On September 20, 2008, a revised version of that agreement was approved by Judge James Peck.

On September 22, 2008, Nomura Holdings, Inc. announced it agreed to acquire Lehman Brothers' franchise in the Asia Pacific region including Japan and Australia. The following day, Nomura announced it's intentions to acquire Lehman Brothers' investment banking and equities businesses in Europe and the Middle East. A few weeks later it was announced that conditions to the deal had been met, and the deal will become legally effective on Monday, 13 October. In 2007, Non-US subsidiaries of Lehman Brothers were responsible for over 50% of global revenue produced.

2008 Finance crisis - 9/2008 bank CEOs

WAMU: Alan Fishman; 18 days, signing bonus: $7.5M and $6M severance.
Wachovia: Robert Steel; 2.5 months so far.
AIG: Robert Willumstad; 3 months. Walked out and declined $22M severance.
Merrill Lynch: John Thain, 11 months. Bloomberg reported that Thain, the former head of the New York Stock Exchange and a Goldman Sachs veteran, and his top two deputies may exit with nearly $200 million.
Lehman Brothers: Richard Fuld, Jr., 15 years. Lehman gave him a $22 million bonus in March, and he pocketed about $500 million while leading the company

Source: money.cnn.com

A bit of PeopleSoft history

Before the acquisition by Oracle -

Craig Conway:
. Left PSFT at 2004
. Joined Salesforce board

Ram Gupta:
. Left PSFT two weeks after Conway's departure, was replaced by Stan Swete

Rick Bergquist:
. Departed