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HOW GREAT CORPORATES TITAN PROFITED AFTER FAILURE.

How Corporate Titans Profited After Failure

In the global picture when the economy is rather faint and discolored, there are no second chances for people who play with money. When they fail to survive the market pressures now, then they are putting their whole business at stake for the future days.

But, though it is a tumultuous situation, there are people, on whose face fortune may give a hearty smile. Have you seen a cat falling down from a tree top? These corporate titans never break their bones, even if they fall, even if they damage their business or even imperil their businesses’ existence. The recession along with the financial crisis cost the U.S. economy about seven million jobs, and left the country a slug. Yet some CEOs resurrected, either hired back by the same company, or starting their new ventures.

Of the 11 corporate titans on the list (money.usnews.com), none had been accused of crimes or illegalities. Still, they were blamed for problems that heavily damaged the firms. All these former CEOs have stumbled upward after being involved in some of the most notorious corporate episodes of the last decade.

Former CEO: AIG

Now: Deputy Chairman, Wills Group

In the year 2005, Martin Sullivan replaced the longtime AIG Chief Hank Greenburg as the Chief Operating officer He presided over many of the company decisions, which were unfortunately fatal for the insurance giant.

For Instance, when Sullivan had the rein in his hands, the America-based insurance firm, AIG issued billions of dollars’ worth of insurance on highly risky mortgage-related derivatives, which left the company seeking the biggest bailout in the corporate history when those derivatives plunged in value and the company became unable to honor its commitments. The firm faced a collapse in 2008 and the very year, Sullivan was forced out of the company.

But, after the tumult, the British insurance firm Wills Group found that they needed a fresh face, and they made Sullivan their Deputy Chairman in 2010, and also made him take the charge of a new global services division of the firm. According to the research site, Footnoted.com, Sullivan earns a base salary of $750,000 approximately.
Tony Hayward
Former CEO: BP

Now: Founder of Vallares

Tony Hayward was atop the British-based oil giant British Petroleum for three continuous years. But in 2010, he had to give away his post in the firm following the Deepwater Horizon disaster. in the Gulf of Mexico, which killed 11 workers, fouled the Gulf with oil and forced BP to put $41 billion for the cleanup process, litigation, penalties and other costs.

When he left, Hayward got one year’s salary, that is about $1.7 million; and he held on to British Petroleum stock that could be worth millions more.

After, getting out of the U.K. based oil firm British Petroleum, he set up a new energy company in the U.K. for himself, which could raise more than $2 billion in a public offering. And the firm, topped by Hayward has plans to use that money to buy and operate energy firms in emerging markets.

Where he is now: Hayward recently launched a new energy firm in the U.K. called Vallares, which raised more than $2 billion in a public offering. The firm plans to use that money to buy and operate more of energy firms .
Mark Hurd

Former CEO: Hewlett Packard

Now: President, Oracle

Mark Hurd is another CEO who bounced back strongly after being fired by one company. Hurd was the former CEO of Hewlett Packard (hp). After the five long years of chairing the top position in the company, Hurd’s career had to face great pressure in August 2010, when allegations of misconduct relating to a personal relationship against Hurd got spread.

Mark Hurd, had to do nothing else, so he resigned, that too paying himself with a $12.2 million cash from hp and with a stock options worth $30 million and more, according to Associated Press. At the backstage, there is an ongoing shareholder lawsuit against the company, which argues that the technology giant had overpaid the departing CEO.

For Hurd the runaway was fortunate as of now, since another tech-giant, Oracle has hired him as its President, with a payment that could top $10 million per year. He now oversees the corporate direction and strategy for Oracle’s global field operations

Stanley O’Neal

Former CEO: Merrill Lynch

Now: Member of Board of Directors, Alcoa

Stanley O’Neal was atop at Merrill Lynch, spending much of career there at the firm. It was in 2002, he became the CEO of the company. He started presiding over the firm, at a time when the company began to place huge bets on subprime mortgages and risky derivatives that generated billions in losses. IN the year 2006, the company committed many of the deals that led to its downfall.

These circumstances nearly sank the firm, and it was taken over by the Bank of America in 2008. During his tenure at the firm, he had earned $91 million, and when he left the firm, it gave him a severance package worth another $161 million, the Financial Crisis Inquiry Commission (FCIC) said.

After O’Neal walked away from Merrill Lynch, he found it no difficult to make ends meet, as the U.S.-based aluminum company, the Aluminum Company of America (Alcoa) made him one of the members of their Board of Directors.

Dow Kim

Former Head: Merrill Lynch

Now: Started a hedge fund

From 2003 to 2007, Dow Kim served as the former head of global markets and investment for Merrill Lynch and there he oversaw a vast increase in the amount of collateralized debt obligations Merrill created and sold. Gradually, he made Merrill the No. 1 Wall Street issuer of these controversial derivatives tied to mortgages, the FCIC says.

Later, those CDOs eventually led to billions in losses and severely affected the firm and weakened it. In the mid 2007, Kim left the company, shortly before the company’s losses began to mushroom. According to FCIC, Kim received more than $35 million for his contributions in the company in 2006.

After leaving Merrill Lynch, though Kim tried to start a hedge fund firm, the firm struggled to attract investors during the 2008 financial crisis.

Thomas Maheras

Former Co-CEO: Citi Group

Now: Director, Discover Financial Services

As the co-CEO of Citi Group’s investment bank, Maheras helped project Citigroup from a bit player in the market for profitable, but risky, CDOs into one of the world’s top originators, including Merrill Lynch. When the securities his division created began to lose value and generate losses that would eventually overwhelm CIti, He resigned his and walked away.

When Maheras left the company, he earned more than $34 million for his contributions in the firm, according to Financial Crisis Inquiry Commission. Soon after he left the company, Discover Financial Services made Maheras its director in the year 2008. He could also start a private investing firm called Tegean Capital Management.

 

Jeffrey Peek

Former CEO: CIT Group

Now: Top Investment Banker, Barclay

It was in 2003 that Jeffrey Peek entered in to CIT. From the day one he began to convert the sleepy, small-business lender into a broader financial-services firm with expanded portfolio of student loans and subprime mortgages. That indeed resulted to be bad decision, and at the end the CIT declared bankruptcy in 2009. Soon afterward, peek resigned from the company.

According to Forbes, Peek earned about $27 million, when he left the CIT group. However, CIT’s acceptance of $2.3 billion in government bailout money prevented Peek from claiming and getting a severance package when he resigned from the company. Now, he is one of the top investment bankers hired by Barclays.

 

John Thain

Former CEO: Merrill Lynch

Now: Top Official, CIT

In 2007, John Thain replaced Stanley O’Neal as the CEO of Merrill Lynch. All the efforts from Thain to keep Merrill’s Losses under control went vain. Finally, he led the company end up in the arms of Bank of America in 2008.

Thain was criticized for other major issues took place in his tenure as well. For instance, an expensive renovation of his office (which he ultimately paid for himself) and $3.6 billion in bonuses granted to Merrill bankers during a year which resulted in the firm’s near collapse and it required federal bailout money to survive. He was then forced out of the firm in 2009. Soon, CIT called him for serving its top position and he earned an annual income of $6 million in cash and stock there at CIT.

Steven Newman
Former CEO: Transocean

Now: CEO, Transocean

Steven Newman had taken over as the Transocean CEO a month earlier to the Deepwater Horizon Incident, though, before that, he was the president of the same. The company paid him $5.8 million in total compensation for 2010. Anyhow, Newman still works as the CEO at Transocean.

Don Blankenship

Former CEO: Massey Energy

After the gas explosion that occurred at Massey’s Upper Big branch coal mine in West Virginia in April, 2010, in which 29 miners were killed, Blankenship and his firm became largely controversial. Though, inspectors had warned Massey for safety violations at the mine, it failed. Subsequently, the firm got merged with Alpha Natural Resources and Blankenship had to leave the firm with a compensation of $14.4 million. Now he has retired from his official life

 

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