It's good to be king

It's good to be king and have your own way.- Tom Petty

Not only is Dick Fuld a billionaire who runs the 4th largest investment bank in the U.S., but he can also throw underlings under the bus when he screws the pooch. It's good work if you can get it. Don't tell me that Erin Callan wasn't doing her master's bidding while she was deliberately misleading investors about Lehman. Don't worry though, this is Wall Street. They're not being shown the door for leading the bank to a 3 billion dollar quarterly loss. They're just being reassigned, sort of like the Seinfeld episode where Elaine keeps promotes the crazed Vietnam veteran in the mailroom at J. Peterman because he's doing such a bad job. Where is the chorus calling for Fuld's head? Isn't the board supposedly looking out for shareholders?

Hollywood got it right about Wall Street 20 years ago.

Gordon Gekko: [at the Teldar Paper stockholder's meeting] Well, I appreciate the opportunity you're giving me Mr. Cromwell as the single largest shareholder in Teldar Paper, to speak. Well, ladies and gentlemen we're not here to indulge in fantasy but in political and economic reality. America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company! All together, these men sitting up here own less than three percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock; he owns less than one percent. You own the company. That's right, you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their luncheons, their hunting and fishing trips, their corporate jets and golden parachutes.

Cromwell: This is an outrage! You're out of line Gekko!

Gordon Gekko: Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated.

Dick Fuld owns about 2 million shares; LEH has a float of over 500 million shares. In total insiders control about 3.6% of the shares outstanding. Do you honestly think these guys are working for the shareholder?

Maybe ol' Gordon was right.