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Lehman chief berated over huge exec bonuses

The US House Oversight and Government Reform Committee has attacked Lehman Brothers chief executive Richard Fuld for authorising huge bonuses for departing exec-utives in the run-up to the bank’s collapse.

Fuld came under fire from committee chairman Henry Waxman during a grilling this week in Washington in the first of a series of probes into the collapse of the bank.

Waxman criticised Fuld for continuing to seek multi-million dollar bonuses for departing executives in the run-up to the collapse. “In other words, even as Mr Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation,” he said.

Fuld was personally criticised for taking more than £178m in pay and bonuses from the bank since 2000 but he denied taking the committee’s initial estimate of £276.2m.

He said: “I think for the years you are talking about here, I believe my cash compensation was close to $60m [£34.5m] and the amount I took out of the company over and above that was closer to $250m [£144m]. Still a large number, though. I want to be very clear. I take full responsibility for the decisions that I made and for the actions that I took based on the information that we had at the time.”

Fuld pointed out that executives of Lehmans owned a big proportion of shares to ensure they acted in the best interests of shareholders.

He said: “We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders.”

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