There, now do we feel better?
I sure hope so, now that President Obama’s finger-wagging pay czar has intimidated Bank of America’s much-maligned chief, Kenneth D. Lewis, into giving up all compensation for this year.
AP
Oooh, there’s even a schadenfreude special: Lewis, already forced into early retirement and under investigation by three different posses, has even agreed to pay back $1 million he had received this year for steering one of the largest banks in the world through the worst financial crisis in 80 years.
Huzzahs and hurrahs all around, and you’ll hear barely a peep from any would-be defenders of Lewis. He is the perfect Wall Street whipping post this season, and there’s abundant reason to applaud this rude slap in his face.
The question is whether this is good policy and a good use of the pay czar’s time—or a transparent ploy by the Obama appointee, Kenneth Feinberg, to cast an ominous shadow over Wall Street pay with a tacit warning: I’ll come after you, too.
If Feinberg’s real agenda isn’t to scare the hell out of the much-despised ranks of Wall Street and score populist points for his presidential boss, why bother with this at all? Bank of America survives on $45 billion in government loans. The pay czar has just recouped $1.5 million: That’s one dollar on every $30,000. What a windfall!
A certain rush of serves-you-right gloating is a natural reaction. The problem: It makes us wallow further in bitterness and envy, awash in recrimination and vengeance. Yet we need these Wall Street guys to be at their best if we want our portfolios to recover. In good times, these guys make money for all of us.
Some of you hate it (or hate me) when I defend Wall Street, and in the case of Ken Lewis it is understandable. The guy pocketed tens of millions of dollars even as B of A tumbled from financial powerhouse to wobbly weakling. His reach exceeded his grasp in the last round of acquisitions he oversaw. He withheld information on Merrill Lynch losses before his shareholders voted to buy the giant brokerage on the cheap.
And some of this antipathy simply is personal: Ken Lewis is arrogant. Chilly and dislikable, from a distance, at least. Some view him as backbiting and backstabbing to rivals, a grudge-holder who dabbles in dirty tricks.
All of which makes him an easy target for the second-guessing Kenneth Feinberg.
Something troubles me in all this, though. Doesn’t a person deserve to get paid something even when he fails at his job? When you get fired, that unkind exit usually is accompanied by severance and all back-pay and unused vacation time—even though you screwed up enough to get the gate.
It is entirely likely that Lewis, in the past year, has worked harder and for longer hours than ever before in his career. His $1.5 million salary amounted to roughly a dollar on every $100,000 of revenue at B of A.
And when he forged ahead on the Merrill deal at an especially frightening time, it helped stabilize the markets and avoid a few more falling dominoes. Hearing his testimony to Congress afterward, you get the feeling he meant to do the right thing, for his country and his company.
Even if he did a bad job in that same pursuit.
Do we really think Ken Lewis conspired to destroy the colossus he helped assemble? That he plotted to make the Merrill acquisition in the hopes that it would cripple his company, destroy its stock price, leave his own compensation deep underwater and forever tarnish his legacy?
I don’t. Ken Lewis may have blown it, but he was one of dozens of high-ranking players on Wall Street who got blindsided by a meltdown that consumed almost everyone. We may yet come to view that Merrill deal as a big win for Bank of America: an army of 15,000 salesmen, bought at the low.
None of which comes as any solace now to the guy who already has been knocked to the ground and is writhing in pain, even as we kick him in the groin yet again. It isn't helping our portfolios, either.
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