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The Five Dumbest Things on Wall Street This Week

Fiorina's Soft Landing
She's in good company

1. Baby, You Can Drive My Carly

This week, Carly Fiorina demonstrated how far women have progressed in the executive suite.

They've gotten so far, she taught us, that they're just as likely as men to be rewarded for their incompetence.

Fiorina, of course, lost her job as chairman and CEO of Hewlett-Packard (HPQ - Get Report) Wednesday, amid growing dissatisfaction with her performance. H-P's stock is worth about half of what it was when Fiorina took control of the tech giant in 1999. Not only that, but the company's 2002 merger with Compaq -- a deal that Fiorina championed in a close and bitter proxy contest -- has failed to live up to Fiorina's promises for it.

But though Fiorina is no doubt bummed about being fired, the company did ease the pain for her. The departing executive will receive a severance package, according to press reports, worth $21 million.

Yes. Just like her male counterparts at other flailing giants, Fiorina was able to receive an outrageously generous severance package despite a job performance that was mediocre at best.

You've come a long way, baby.

2. The Good Times at the NYSE? They're Langone.

The New York Stock Exchange's scandalous overpayment of former CEO Dick Grasso claimed another victim this week: Wall Street elder statesman Kenneth Langone, who is resigning from General Electric's (GE - Get Report) board, it was revealed Tuesday, to defend his role in the matter.

We're not surprised.

Granted, we're not certain, as New York Attorney General Eliot Spitzer alleges in a civil suit, that any legal responsibility for the debacle lies with Langone, who chaired the NYSE's compensation committee for four crucial years during Grasso's tenure. We'll leave that for judges and lawyers to decide.

But after reading the NYSE's newly public report on what went wrong with Grasso's pay, we come away flabbergasted at how Langone and other members of the exchange's board let Grasso's pay and benefits spin out of control.

A running theme of the report is that hardly any of the people responsible for approving Grasso's pay -- most of them uninformed and/or incurious -- had the slightest grip on minor or major details, such as Grasso's buildup of an embarrassingly large retirement package.

In the tragicomic tale, a few choice details stick out. NYSE human resources chief Frank Ashen, for example, told investigators that he didn't regularly provide to the compensation committee information about part of Grasso's retirement kitty growth because it was considered purely a "benefit," not "compensation."

Benefit, compensation, whatever. It's all money, right?

How Grasso Got Greener
Under Langone's watchful eye

Once the compensation committee realized how big Grasso's retirement kitty had become, they apparently tried to hide that fact from the rest of the NYSE board "in an effort to minimize conversation on the matter," reported one consultant.

And when, at an August 2003 meeting, the full board approved a $139.5 million retirement payout for Grasso, no one bothered to mention that Grasso would subsequently be due another $48 million. It wasn't necessarily a conscious omission on behalf of members of the compensation committee, however, since even several of them apparently didn't know about the money.

Given that most board members were captains of industry, the disengaged ignorance documented in the report is shocking.

If these people had been as clueless at their respective companies as they were at the NYSE, they wouldn't be on Wall Street. They'd be on Skid Row.
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