After Wednesday's emergency
third-quarter earnings report, Lehman Brothers Inc.'s CEO Richard Fuld is certainly standing on the edge of a precipice. Could he be dreaming of jumping off with his golden parachute at the ready? With his reputation at stake, Fuld's
restructuring plans could either soar or sink Lehman. The plan raises many questions including how Lehman would reposition itself and Fuld's strategy for the company's future growth.
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And what about Fuld's plans? He has been with the company since 1993. Fuld, who has been in talks to sell or spin off Lehman assets for some time, while also reshuffling management three times in four months, so far has not come up with a resolution as more and more rumors pummel the company's stock.
Fuld's announcement Wednesday confirmed rumors that Lehman is looking to sell assets, but now Lehman needs bidders and capital. Desperate times call for desperate measures, and selling under pressure could mean selling the assets for less than they may be worth. According to Reuters Lehman hopes to announce an asset sale in October, so only time will tell.
Is Fuld feeling the heat?
There are rumors that Fuld could resign or even be ousted by the board. Sources told The Observer that Lehman's chief operating officer
Bart McDade is assuming many of Fuld's former responsibilities. But if the board were to go outside for a replacement, rather than tap McDade, the available candidates are rather thin because other banks already have hired the experienced talent.
So what would Fuld do if he can't turn the company around? He could jump with his golden parachute. Blogging Stocks claims Fuld could get
more than $241 million if he leaves:
According to the proxy, Lehman would have awarded the payment to Fuld
for an "involuntary termination without cause" provided he did not
engage in conduct that was "detrimental" to the bank. If he had died or
become disabled, Fuld's payoff would have been $434.7 million.
That's a pretty comfy cushion to land on. - Maria Woehr
