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Don't feed CEO greed

September 17, 2008

Re "Unpack the parachutes," Sept. 12

The Times' editorial describes the outrage of politicians over the multimillion-dollar severance payouts for the ex-chief executives of Fannie Mae and Freddie Mac.

These are not isolated cases -- there are other major cases of companies losing millions, or even going bankrupt, while their CEOs earned millions in severance pay and other compensation. The politicians who are outraged in this instance did not do much to create and enforce effective regulation of the mortgage market, or try to curb the obscene sums that many CEOs make, often without any relation to their performance.

Your editorial wants corporate boards to "guard against paying for failure." But board members are often executives too -- they are the CEOs' peers -- and are usually selected by management.

Unless influential investors such as major pension funds forcefully intervene, the outrage will continue.

David Shichor

Fullerton

One of the most enduring (folk?) tales about the Depression is that at least the CEOs of that era had the good grace to leap out of their high-rise buildings out of despair and/or guilt when their companies failed.

Today's CEOs walk away with hundreds of millions of dollars for having presided over the ruination and bankruptcies of the companies they controlled.

This is what Republicans call the success of the "free market." The only thing the market is "free" of is responsible regulation, fiscal responsibility and fiduciary duty to companies' shareholders. CEOs, however, are free to feed their greed and contempt for middle-class Americans, so many of whom struggle for the basic necessities of life and health.

Frances E. Murphy

Monterey Park

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