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Taxpayer Perks for Ex-CEOs

Top executives at bailed-out banks aren't the only people accepting lavish benefits at government expense. Some of their predecessors are too.


Much outrage has been spent on the retreats, private jets, and bonuses at companies that are being bailed out by taxpayers. Some companies have responded by paring back the perks-or paying back the cost of them. Many, however, are still on the hook for generous benefits bestowed upon CEOs and others who stepped down before the bottom dropped out of the .

These executives may no longer be calling the shots at their companies-indeed, their companies may no longer exist. But someone's still paying for their private jets, chauffered cars, secretaries, and other perks. That someone is shareholders, and at banks bailed out by the government, the shareholders include everyone who pays taxes.

It's impossible to know how much the free and other goodies cost, since there are no rules requiring companies to disclose what they spend on former executives. Here are a few examples:

Edward E. Crutchfield
Former chairman and CEO of Wachovia

Crutchfield is eligible to receive $1.8 million for the rest of his life under a "special retirement" agreement signed back in November 2000, when he retired. The agreement also called for Crutchfield to receive office space, a personal secretary, and office supplies for the rest of his life, as well as access to the corporate jet for 120 hours a year for the first 10 years post-retirement. A Wachovia spokesman said that Crutchfield gave up the corporate jet perk about five years ago. Wells Fargo, which received $25 billion under the Troubled Asset Relief Program, acquired Wachovia on January 1 after federal regulators pressed Wachovia to find a buyer during the banking meltdown. Crutchfield was traveling out of the country and could not be reached for comment.

Source: filing.

G. Kennedy Thompson
Former chairman and CEO of Wachovia, after Crutchfield

ThompsonThompson, who was forced out by Wachovia's board in June 2008, will continue to have access to an office and executive assistant through June 2011. A Wachovia spokeswoman said the agreement stands, despite Wells Fargo's acquisition of the bank. Thomspon could not be reached for comment.

Source: Securities and Exchange Commission filing.

David Sambol
Former chief operating officer of Countrywide Financial

Sambol was awarded $20 million from Bank of America when it acquired the struggling mortgage lender in January 2008. He was to receive half of the sum on the first anniversary of the deal-January 10 of this year-and the rest next year. Under the agreement, Sambol was also entitled to the corporate jet, a company car, country club dues, and financial counseling services through the end of 2009. A Bank of America spokesman declined to comment on whether the $10 million fee had been paid. Sambol could not be reached for comment.

Source: Securities and Exchange Commission filing (see pg. 56 and 57) .

E. Stanley O'Neal
Former chairman and CEO of Merrill Lynch

OnealBank of America, which agreed last September to buy Merrill for $50 billion, will cover the cost of O'Neal's Manhattan office space as well as the salary of his executive assistant through October 2010. The payments were included in an agreement signed when O'Neal, who is widely blamed for Merrill's failure, retired from the brokerage in October 2007. Bank of America last week said that Merrill Lynch lost $15.8 billion in the three months before the deal closed on January 1. O'Neal could not be reached for comment.

Source: Securities and Exchange Commission filing.

Charles K. Gifford
Former CEO of Fleet Bank

Gifford is another acquisition legacy on Bank of America's books. For the past four years, the bank has provided Gifford with access to the company's corporate jet for up to 120 hours a year. Under his agreement, Gifford also receives office space in Boston and a secretary "for as long as Executive may request." Gifford's agreement also gives him the ability to purchase four of Bank of America's season tickets to 15 Red Sox games at face value. Because Gifford is still on its board, the bank is required to disclose the value of these benefits, which added up to $1.6 million in 2007. Bank of America received $15 billion in money under the Troubled Asset Restructuring Program in October 2008. Gifford could not be reached for comment.

Source: Securities and Exchange Commission filing.

Charles O. Prince
Former chairman and CEO of Citigroup

PrincePrince continues to receive office space, secretarial services, and other perks from the failing bank, including a car and driver. The company is obligated to provide these benefits through November 2012. A Citigroup spokeswoman confirmed that the benefits are still being provided. Prince, who ran the giant bank when it began its spiral downward, could not be reached for comment.

Source: Securities and Exchange Commission filing.

John S. Reed
Former co-CEO of Citigroup

Reed struck an agreement when he left the bank in July 2000 that requires Citi to provide him with an office, secretarial support, and a car and driver for "as long as you deem useful." In the event that Reed relocated outside the New York area, Citigroup agreed to provide the office and secretarial support in another location up until Reed turned 75. Reed declined to comment.

Source: Securities and Exchange Commission filing.

William B. Harrison Jr.
Former chairman and CEO of J.P. Morgan Chase

Harrison, 65, will received office space and administrative support from the bank until he turns 70. He stepped down as CEO in December 2005 and as chairman a year later. A Chase spokesman declined to comment on behalf of Harrison.

Source: Securities and Exchange Commission filing.

John A. Kanas
Former chairman and chief executive of North Fork Bank

Kanas personally reaped about $212 million when he sold North Fork Bancorp to Capital One in March 2006. He left Capital One in August 2007, but still has access to an office suite in Long Island, where North Fork was based, as well as an office in Manhattan. In his separation agreement, Capital One said the Long Island office would be "built out to the executive's specifications." Capital One, which received $3.5 billion in TARP funds in November 2008, also provides Kanas with an administrative assistant and a car and driver through the end of this year. Kanas was traveling and could not be reached for comment.

Source: Securities and Exchange Commission filing.

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