Easiest Job on Planet: Bank CEO
Posted April 22, 2008 | 09:14 AM (EST)
Read More: Bank CEOs, Banking, CEO Bonuses, CEO Compensation, CEO Pay, Finance, Financial Crisis, Fortune Magazine, Market Crisis, Breaking Business News
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Looking for a cushy job with great pay and low responsibility? Be a bank CEO!
Here's how it works:
- Take the job after an economic downturn, when your predecessor is forced out after presiding over the loss of billions in bad-debt and trading write-offs (don't worry, your predecessor won't starve in retirement).
- Immediately take huge additional write-offs and reserves and blame them on your predecessor. Clean up balance sheet so your performance bar is so low you could fall over it.
- Announce "new era" in which Your Bank will focus on conservative, fee- and spread-based businesses in which you grow steadily and prudently.
- Sit in your chair for two years while economic recovery (and your earlier write-offs) deliver strong earnings to the bottom line.
- Smile for the cameras. Have PR people place a Fortune cover story entitled "The Wizard Who Turned Around [Your Bank"]!
- Renegotiate contract extension from position of strength. Include new provisions that tie your comp directly to earnings and stock performance.
- Announce that, given the huge opportunities in the markets, Your Bank will take a bit more risk (prudent, of course) to improve return on equity.
- Encourage your traders to make huge bets.
- Sit in your chair for three years and collect at least $50 million a year during rest of bull market while those bets pay off.
- When market finally turns (sorry, it always does), briefly deny that the downturn will affect Your Bank.
- When it's clear that your traders were just bull-market geniuses and have gambled away all the "profits" Your Bank booked in the previous three years, blame them and express disappointment. Then hang around to see whether market cares.
- If market demands resignation, resign, collect $500 million severance, and join private equity firm.
- If market yawns, re-up for another cycle and do it all over again!