Lehman Brothers: Who Gets Hurt?
Matt Yglesias snarks,
Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who clean the bathrooms. This is because in the United States of America, hard work is the way to get ahead.
Now that’s a great line. But is it really true?
A March AP story reported that “Lehman Brothers Inc. Chairman and Chief Executive Richard Fuld received compensation valued at $22.1 million in 2007, a year in which the company weathered the subprime mortgage collapse better than its rivals.” That last clause has suddenly been overtaken by events, obviously, but one presumes Fuld will see his compensation drop rather starkly.
The story does not have comparables for the custodial staff. Salary.com puts the median salary for “anitor” in the United Sates at $23,839. Given that Lehman was headquartered in Manhattan, let’s say they paid their’s $30,000.
I’m guessing that it’s going to be far easier for Lehman’s janitorial staff than their executives to find comparable replacement positions.
Technically the janitorial staff may not even suffer at all. For example, they might be employed by whomever owns the building, and if it isn’t Lehman then few worries. If it is owned by Lehman it maybe be subcontracted out, so again, possibly less worries than for say top level executives, at least in terms of pay drops, job losses, etc.
And this is Manhattan, where real estate is always at a premium, or at least that is what I’ve been lead to believe, so chances are that building is going to be occuppied in short order even if Lehmen were to fall into a black hole yesterday–i.e. somebody will still be needed to maintain the building.
Really, Matt needs to remove his head from his fourth point of contact.
Since a lot of Lehman Brothers employees received 10% to 60% of their compensation in restricted shares of Lehman stock (if I heard right this morning), the bathroom cleaners might end up getting paid more than people higher up the salary pole.
Wouldn’t you like to work in a company run by young Mr. Yglesias?
Didya see the stockmarket? Ouch!
No because when it comes to running a company he is an idiot.
The people most likely to be hurt will be the employees upto mid-level managers and even some of the lower level executives. Also, the stockholders will be hurt. But this doesn’t matter to Matt because these people are “rich”.
Perhaps my sarcasm failed to shine though brightly enough. One of the problems with most progressives, especially the younger ones, is they haven’t the slightest idea how the real world works, only how it is supposed to work in their perfectly constructed little utopias.
Oooohhhhh…. My heart just bleeds for poor Richard Fuld! Poor, poor, POOR Richard Fuld!
In what world does a guy/gal who make $30,000 a year and probably lose his job due to no fault of his, (the janitorial contract was most likely subbed out, but if Lehman no longer occupies the floors/building…. They don’t need him anymore)….come off better than poor RF?
In PD Shaws worse case scenario, poor little RF STILL made $8.8+ million dollars last year! (assuming his stock is now worthless, he has no golden parachute (HEE HEE), his NY condo is now worthless, the other boards he sits on no longer want to pay him for not showing up at board meetings, etc, etc etc… ad infinitim, HE STILL NEVER HAS TO WORK A DAY OF HIS LIFE AGAIN) And all this for running a multi-billion dollar bank into the ground.
Anybody? What world do you live in?
Here is a clue: It ain’t New York, and it sure as hell ain’t Crawford County, Missouri.
Stop drinking the kool-aid.
No matter who owns the building, they’ll still need the toilets cleaned!
Floyd:
Not if nobody is using them.
Yeah, Steve, right. The janitor will be better off. Why, he’ll get to find another job making $30,000 a year, while poor, oppressed Mr. Fuld will only be able to take a year off (or so) and sit in one of his houses (hmm, maybe he doesn’t even know how many he has–I guess he’ll just have to get back to us on that one) sipping his coffee and thinking about what went wrong. Well, I’m sure he’ll conclude that it wasn’t his fault, then hire a headhunter to help him find another exec position, maybe not at $22 million a year, but perhaps $5 million. A steep pay cut, to be sure. He may have to give up the extra house(s)–but at least he can keep the Mercedes.
Seriously, Steve, how far afield are you where you can even suggest something like this as a general proposition?
More classic Verdon. Why can’t you be more like James and at least use your head to think and not your knee to jerk?
OK, Chuck. I’d wager you’d be hard pressed to find one young conservative who knows how the world works; indeed, name me one young person in general who knows how the world works? That’s why it’s called “youth” and not “wizened old age.” And in any event, I’d rather hope for a better future than live in a mythical, non-existent past.
That’s interesting Charles. Are the people in urban coastal areas in this country (you know, those wacky progressives) who do the heavy lifting keeping our country’s economy moving forward just getting lucky?
I dunno, Anin;
Wasn’t that the mantra a whle back, that people who were well off didnt get their by individual effort, but merely luck?
Possibly it was in your imagination, where you seem to spend most of your time…
Eric,
1. I don’t think I claimed that young conservatives have a stunning grasp of the way the world works either. James is fond of quoting young Mr. Yglesias with some frequency as though he has a clue about the world beyond his sheltered echo chambered life. His prerogative, but I can’t figure out why.
2. Progressives live everywhere, not just on the coasts. Gee, isn’t Senator Obama from Illinois? And, of course, many people on the coasts are not progressives.
3. Classic false dichotomy, the choices aren’t agree with Eric and have a better future or agree with Charles and live in a mythical, non-existent past. But as William of Baskerville once said in a mythical non-existant past, “To control nature we must first obey it.”
4. Hope is not a strategy.
5. Only the people on the coasts are doing the heavy lifting for the economy? Please. Though it does sometimes seem as though progressives on the coast are keen to practice helotage on those in flyover country.
Honestly, I’ve wondered about that myself. Personally, I find Yglesias wanting at any point beyond “hello”.
In fairness, they do seem to be concentrated around population centers.
Yeah, that does seema stretch at best, doesn’t it?
Eric,
I do believe that nowhere have I written anything suggesting that Mr. Fuld should be sympathized with nor that he will be made worse off than a janitor.
Your inability to read and understand what I have written can be logged off to either stupidity or intellectual dishonesty. I’ll let you pick which one…or even a bit of both–never let it be said I’m not generous.
It would be interesting to know how many Fortune 500 companies were founded or are headquartered in red states. Anyone know?
Call me elastic man…
“Your inability to read and understand what I have written can be logged off to either stupidity or intellectual dishonesty.”
May I quote you, Steve?
“Technically the janitorial staff may not even suffer at all.”
Have you ever tried to live in New York city on $30,000 a year? EVER? Is that not suffering? I suppose you meant to say that “they are not suffering any more”?
Truly, Steve, you’re “stupidity or intellectual dishonesty” astounds me. To compare a man/woman who makes $30,000 per year to a man who makes $33,846 per DAY… (that is in cash, not stock options)…
I am left speechless by your complete…. idiocy?
Stop drinking the kool-aid Steve.