Lehman Bros head took home $300m

 

Lehman Bros head took home $300m

Richard Fuld: "I don’t expect you to feel sorry for me"

The head of failed US investment bank Lehman Brothers has told Congress that he took home about $300m in pay and bonuses over the past eight years.

Richard Fuld, whose firm went bankrupt last month, made the statement during testimony before the House Oversight and Government Reform Committee.

The panel is holding its first hearing into the cause of the financial crisis.

It is being held amid renewed market turmoil, with shares plummeting further in Europe and the US.

Committee chairman Henry Waxman opened the hearing by saying the credit freeze threatened the entire economy.

"To restore our economy to health, two steps are necessary," he said. "First, we must identify what went wrong. Then we must enact real reform of our financial markets."

‘Feeling horrible’

Turning to Mr Fuld, Mr Waxman asked whether it was true he had received $480m (£276.2m) in pay and bonuses since 2000 – and whether this figure was fair.

Mr Fuld replied that the correct total was about $300m (£172.6m).

"We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders," he said.

Mr Waxman also criticised Mr Fuld for requesting multi-million dollar bonuses for departing executives just days before last month’s collapse.

"In other words," he added, "even as Mr Fuld was pleading with [Treasury] Secretary [Henry] Paulson for a federal rescue, Lehman continued to squander millions on executive compensation."

Mr Fuld said he took "full responsibility for the decisions that I made and for the actions that I took" and defended his actions as "prudent and appropriate" based on information he had at the time.

"I feel horrible about what happened," he added.

Lehman’s failure set off a financial panic which prompted a $700bn rescue package approved by Congress last week.

GLOBAL FINANCIAL CRISIS

KEY STORIES

Shares plunge on financial fears

Brown seeks clarity from Merkel

Iceland acts to avoid bank chaos

No new cover for German savers

Germany agrees bank rescue

BACKGROUND AND ANALYSIS

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Why did bail-out pass this time?

Public views of the rescue plan

What would Armageddon be like?

Have bail-outs worked?

CRISIS OVERVIEW

How the turmoil affects you

Q&A: US $700bn bail-out plan

Financial crisis: Your stories

B&B: Your questions

Timeline: Global credit crunch

Credit crunch jargon explained

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Who’s gone, the size of the bail-out and share price falls

HAVE YOUR SAY

Can action by EU states ease the credit crisis?

Experts forum: How can EU ease financial crisis?

VIDEO REPORTS

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RELATED INTERNET LINKS

House oversight committee

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BBC NEWS | Americas | Lehman Bros head took home $300m

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