CEO Paid To Go To Prison
It's good to be a CEO, even if it occasionally means a little prison time.
Fog Cutter Capital Group on Friday gave Andrew Wiederhorn, its prison-bound chief executive officer, a deal perhaps unprecedented in the post-Enron era of corporate reform: a continued position atop the company's organization chart with full salary even as he spends 18 months in federal prison.
"Full salary" means $350K a year, on top of a $2 million "leave of absence" payment and a bonus to be named later. The $2 million matches the restitution that Wiederhorn agreed to pay to the people he helped swindle.
Fog Cutter's board of directors, charged with looking out for the company's shareholders, are doing a good job of looking after Wiederhorn and his family and friends, who control 60 percent of the company. The other shareholders can't be pleased to see their stock losing value in response to the decision to keep a prisoner in his corporate position -- a decision made no less disturbing by the hiring of Wiederhorn's father-in-law as co-CEO.
The board members have close ties to Wiederhorn, ties that apparently motivate their belief that Wiederhorn should be rewarded for his dedicated (albeit illegal) efforts on behalf of the company. The minority stockholders should consider a lawsuit against the rogues who are placing their own interests (and Wiederhorn's) ahead of the shareholders.'
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