Lehman CEO Fuld: Poster Boy for Whats Wrong With Capitalism

by James & Miel on January 26, 2009 · 0 comments

One of the downsides of widespread ownership of shares of common stock is that individual owners have a reduced say in how a company is run. This situation effectively allows corporate officers like CEOs and CFOs defacto control of companies. If you’re not sure about this argument check out John Bogle’s book, The Battle for the Soul of Capitalism.

One of the unfortunate results of this state of affairs is that company CEOs often fail to act to safeguard the long term future of their companies.

A great example of this is the recent actions of former Lehman Brothers CEO Richard Fuld. Fuld took $22 million in compensation in 2007 and let his company go bankrupt. Now he is transferring his assets out of his name to avoid payback from the shareholders he stiffed. How unfortunate.

Best,

James

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