• About 40 percent of American CEOs found  themselves in hot water over the past 20 years due to poor  performance
  • Though fired for their ineptitude, eight  per cent received ‘golden parachutes’ worth an average of  $48million

By  Ryan Gorman

PUBLISHED: 22:47 EST, 28  August 2013 |  UPDATED: 01:52 EST, 29 August 2013

A significant number of America’s  highest-paid chief executives have found themselves in hot water over the past  20 years, according to a new study.

Roughly 40 per cent of CEOs among the 25  highest-paid in the US have been fired, fined or bailed out, according to the  report released Wednesday by the Institute for Policy Studies. This finding  comes despite their astronomical pay – about 354 times the average – coming with  an expectation for sky-high performance.

Companies paying a premium for elite  talent  often do not realize the return they expect, the report says. In  at least one  instance, a CEO ended up with a conviction that would have  led to jail time had  he not died before sentencing.

Defiant to the end: Former Lehman Brothers Chairman and CEO Richard 'Dick' Fuld testifies to Congress about the firm's collapse 

Defiant to the end: Former Lehman Brothers Chairman and  CEO Richard ‘Dick’ Fuld testifies to Congress about the firm’s  collapse

 

The non-profit analyzed the 25 highest-paid  CEOs for the each of the past 20 years and found that almost half of them had  paid some sort of price for their poor performance.

Of the CEOs on the list, eight per cent  were fired, but received ‘golden  parachutes’ averaging $48million each upon their exit, according to the  report.

Of the fined, eight per cent ended up costing  their firm’s over $100million in fines each, with one CEO paying fines out of  pocket, for stock option back-dating, according to the report.

Most scandalously on the list are financial  executives, all of whom ‘were forced to receive bailouts for running their  companies into the ground,’ according to the report.

In fairness, financial industry CEOs didn’t  have much of a choice when it came to bailouts received though the Troubled Asset  Relief Program (TARP).  All large banks received TARP bailouts  whether they wanted/need them or not.

The most publicized of those was Lehman  CEO  Dick Fuld. While Fuld pocketed over $466million in compensation  between 2001  and 2007, according to Reuters, he reportedly contributed  to the once prestigious firm’s spectacular 2008 collapse.

Busted: Former Enron Chairman and CEO Kenneth Lay was convicted of 10 counts of securities fraud and conspiracy, but died of a heart attack before sentencing 

Busted: Former Enron Chairman and CEO Kenneth Lay was  convicted of 10 counts of securities fraud and conspiracy, but died of a heart  attack before sentencing

 

Even more notorious is Kenneth Lay. As Enron  CEO, Lay saw the firm rise to prominence on the back of predatory energy trading  and book cooking the likes of which was unprecedented in American  history.

While handsomely reaping the benefits of a  top 25 CEO, Lay oversaw the greatest corporate bankruptcy in American history,  prior to Lehman. Enron’s collapse put thousands out of work, wiped out the  pensions of many life-long employees and resulted in a Houston federal jury  finding the chief executive guilty in 10 counts of securities fraud and  conspiracy. Facing the rest of his life in prison, according to the New York Times, Lay died of a heart  attack before his sentencing.

The report suggests that reigning in CEO pay  is the only answer to this problem.

Reforms surrounding the disclosure of CEO to  worker pay ratio and pay restrictions on financial firm CEOs specified in  Dodd-Frank legislation still not yet implemented three years after President  Barack Obama signed the bill into law are suggested.

Another suggestion is closing the IRS   loophole that allows companies to deduct executive compensation from payroll  taxes, which the report calls a ‘outrageous.’

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