Maybe the fabled investment bank is getting to the point where only employees will be interested in holding the stock of a company whose chief products recently have been poor judgment and bad results
The firm lost a record $2.8 billion in the last quarter. Much more in write-downs has been registered. The stock stands not at a 52-week low or a five-year low, but at a low not seen since 2000. Colossally bad decisions have been made by this firm on several fronts, some leading to the recent ousting of top executives. With that background, it’s hard to see how the word “bonus” could even be whispered. But that’s exactly what has happened at this beleaguered icon of Wall Street. Reports indicate that Lehman plans to issue a mid-year stock bonus to its employees.
If you want a glimpse into the kind of thinking that has brought Lehman to the crisis it’s now facing, this is it. Shareholders are hurting; homeowners and families throughout the U.S. are experiencing economic pain unseen perhaps in generations. Job losses and cutbacks, from big auto and Bear Stearns to major airlines and Starbucks, are mounting fast. But at Lehman’s, it’s Christmas in July.
Running a business the old fashioned way by building value and creating sensible products that stand the test of time seems to have become passé on Wall Street. So, too, has the idea that there are times when some sacrifice on the part of management and employees is justified, especially when the rest of the country is suffering. This, it would seem, is the predictable result of the kind of self-aggrandizing leaders and disengaged boards that have also come to be synonymous with Wall Street.
Maybe Lehman employees should get more stock, because the way the firm is going, you’d have to wonder what sane investor would put their confidence in a company whose chief products in recent months have been poor judgment and bad results.