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Equifax CEO Richard Smith Who Oversaw Breach To Collect $90 Million (fortune.com)
An anonymous reader shares a report: The CEO of Equifax is retiring from the credit reporting bureau with a pay day worth as much as $90 million -- or roughly 63 cents for every customer whose data was potentially exposed in its recent security breach. Richard Smith, 57, is the third Equifax executive to retire under pressure following the company's massive data breach revealed earlier this month, putting the personal information of as many as 143 million people at risk. Equifax said Tuesday that as a condition of Smith's retirement, he "irrevocably" forfeits any right to a bonus in 2017, an amount that under normal circumstances would have totaled more than $3 million -- the bonus he received in 2016 -- according to the company's retirement policy. But the CEO is still set to collect about $72 million this year alone (including nine months' worth of his $1,450,000 salary), plus another $17.9 million over the next few years. That's when the rest of Smith's stock compensation hits a few important milestones or "vests," allowing Smith to essentially put it in his bank account. Altogether, it adds up to a total potential paycheck of more than $90.1 million, according to Fortune's calculations based on Equifax securities filings.
He would have cleared probably over $200K if he retired normally. Now he is in the poor house with only $90 million.
Because that's how you get a civil war.
The stock is recovering nicely. This would probably be a good time to invest as it is selling at about a 40% discount.
Hm. Could someone post his social security # and personal information for us all to see... If only, you know, there were some way that such info had been, how do you call it.. hacked somewhere?
[snark]Business as usual in Americana.[/snark] Not saying his transactions are or aren't overtly suspicious, but significant profits amidst potentially massive losses for so many make one look like a complete douche.
There is no XUL, only WebExtensions...
... because your kind will continue to not really give a shit and just complain to each other without hanging them high.
People were yelling 'we are the 99%', but so what?
We can't do shit about scams cooked up by the ultrarich 0.1%
Not only they handed over our IDs, our credit info, our address, our property list, and so on to the hackers (by employing a music major overseeing online security, thanks to Political Correctness), they still get to get tens of millions of rewards doing such a criminal thing !
Go fuck yourself, you motherfucking 0.1% fuckers !
That's all
I mean, nobody gives me that kind of kickback when I bungle my job enough to get forced into retirement. What kind of punishment is that supposed to be?
I don't think there is a business case for CEOs, obviously they don't benefit shareholders in a long term. The CEO position should be eliminated in favor of inside-track promoted Director drawing a salary tied to a fixed multiplier of average worker's salary. No pension or retirement contributions and no stock options.
We need to get away from bonus and stock manipulation culture that creates direct incentives to CEOs that conflict with long-term shareholder interests.
a 90% marginal tax rate on income over $1 million a year (note, that's _marginal_, meaning you don't pay it until you hit that threshold, before that you're paying the same as folks in the lower brackets).
The 1%ers take care of each other and make sure that wealth accumulates at the top. Then that wealth is turned into power so they can get away with stuff like this. Money is power and we've let about 20,000 people have nearly all that power because we're not comfortable with taking it away from them. This stuff is gonna keep happening until we do.
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Crime and corruption pays and it seems to be getting easier to get away with it too!
It's cheaper than keeping him.
deleting the extra space after periods so i can stay relevant, yeah.
..would behave like an actual golden parachute. Some landing that'd be if they still took it anyway.
Whatever happened to Captains going down with their ship?
Look back up at my post, now look back down, you're on the Internet. Now look back up. I'm a signature.
NOT! Gee, I wonder why companies like this don't take cyber security seriously? If there is a massive breach like this one, do those responsible feel the slightest bit of personal pain from it? No. Just rake in the bucks and let everyone else suffer the collateral damage.
Claw back the bonuses for the last several years.
If the stock tanks, he should not get any benefits!
Seems that appearing incompetent and compromising the privacy information for millions at $0.63 a head is the way to go.
Why didn't I think of this????
I, wish I could sell snake oil this well.
There's no income inequality in this country.
This is what I call a Perfect Failure - an incident, which in spite of being considered a failure by all parties involved, still leaves the party responsible better off than they were before.
From the perspective of the CEO, the "failure" was purely cosmetic. If only I could collect $90 million when I made a mistake..
The society for a thought-free internet welcomes you.
They should have asked me to be the CEO of Equifax. I could have failed that badly for only $80 million.
If you only made 50k a year and didn't have a "C" as the first letter of your title.
Make it $2,000,000 @ 90% and that'll be the inflation adjusted number from the Eisenhower era tax rates. Don't worry, the $1,000,000 club would be clipped @ about 75 - 80%.
We also need a Pickety style capital tax. I"d put that threshold at $2,000,000 - that's what a middle class peon needs to really retire comfortably (keeping his lifestyle). Over $2,000,000 - progressive up to 50%?
And the inheritance tax must stick around.
When you can get a bullet for a few cents and someone to use it for a couple thousands...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
While I don't feel he should get this kind of compensation after such a major screwup, it makes no difference to those affected. Distributed among all of those affected, 63 cents will not fix any thing. Even if the $90M was distributed to 1% of those affected, it amounts to $63 and again wouldn't repair the harm done ($90M divided by 1.4M (thats ~1 percent of 143M). And taking away his severance or whatever its called, I highly doubt it will stop the next executive from thinking he/she can get away with it.
I've always said English was my second language. Had Romeo and Juliet been written in C, I might have understood it.
Corporate death penalty would provide a real punishment for the company and prevent all that stock from vesting. Win-win in my book. After all, corporations are people my friend, and if a person harmed 140+ million people they'd be put in prison for life, would they not? And you can't put a company in prison (nationalize it and make it a not for profit business?), so death penalty is the only other real punishment option.
Conservatives often say that huge inequality is necessary to motivate people to work hard, grow companies, and create jobs. However, golden parachutes like these do just the opposite. The "punishment" for screwing up is a luxurious quiet retirement.
Table-ized A.I.
For any of us pissants making less than a million a year, once we quit, retire, or are terminated, our "vesting" in whatever our stock options are is over and done and we can cash out at our current vested rate. So this ass-hat gets to "retire," take in around as much as he would have made had he continued to work this year, take in funds for the next several years (though not at the rate he would have if he had stayed, poor thing) AND continues to vest his stock options?
I need to find me a company to run that I can use to fuck some shit up and cash out on top. Good lord.
all i know is the week before the breach, my bank accounts were tampered with and locked. 4 different banks???? they will file for bankruptcy soon!
Come on, man. You know this works. It's a club where they all pay each other with someone else's money.
How is he going to provide for his family now that no one will want to hire him again?
That did great things for their economy and productivity.
The Soviet people loved their economy so much, they overthrew their government.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
I am so sick of people saying "He is gettig paid..." He has to buy stock, albeit at a discount. No one is giving him money except other investors. The company will only experience unrealized gains, not be out of pocket anything.
I would think there would be a clause putting his equity in jeopardy in the case of malfeasance.
Oh wait, he probably has the overriding indemnification-for-all-things clause in his agreement as well.
My mistake.
Estate taxes are good at collecting what amounts to a wealth tax from actual real estate holdings located in (or near to) any major OECD metropolitan area, or associated fly-over country.
I'd actually like to see the estate tax scaled by age difference between the goner golden cuff links and the grinning silver spoon.
For a long time, you could make a real return (without even scamming the IRS) of about 4% per year on equity.
So scale back the size of the lump bequeathed to each recipient by -4% (or -3% per year, if you're just too libertarian verklempt) based on the age difference. Basically, under this formula this generational stake invested in a mutual fund will maintain constant value forever, if not consumed.
If the recipients want to live a lavish lifestyle without depleting their unearned nest egg, they they have to flex their aptitude and try to beat default market return (opportunities for the enterprising young man of wealth and any smidgen of competence abound).
If the age difference is 40 years, the formula is 0.97^40 = 29.6% passed along (using the lower, verklempt rate), with 70% owed to Uncle Sam.
Now I'm a generous man, and I'd actually allow this entire 70% to be eligible for deferred collection upon demise of the recipient, out of any inheritance passed along (before making this calculation again). And of course there would also be a full exemption at the bottom for estates worth less than $5 million.
Say, in scenario A, silver spoon inherits $1 billion, with 70% earn marked for collection upon silver spoon leveling up to golden cuff links.
He invests it at market par, with a 4% real rate of return (after income taxes, inflation, yada yada) and spends (not invests) $200 million on a lavish lifestyle.
He then dies with a pile worth $2 billion dollars (inflation normalized) of which $700 million is now owed to Uncle Sam on deferred collection, with the remaining $1.3 billion subject to the original formula (since his equity return beat Uncle Sam's taxation rate by 1%, despite squandering $10 million/year on hookers and blow, he still dies in possession of an even larger fortune—inflation normalized).
Scenario B: Britney inherits $1 billion, with $700 million flagged for deferred collection. She promptly invests in a wild scheme (e.g. Target Canada), shaves her head, has children by two different men, yada yada, before waking up one morning, wiping away the last tear of self pity, and discovering that she is only worth $500 million. Awwww.
She then proceeds to invest wisely and makes $100 million back again, but her $600 million estate actually owes $700 in deferred collection to Uncle Sam, so it takes $595 million, and calls it settled (Uncle Sam lost $100 million in this debacle, as compared to the first story, as well). Thus, she passes along only her meagre $5 million basic exemption post-demise (a huge loophole in practice) to her many offspring, who must now navigate life with only the silver spoon of their elite childhood (and some token dosh) to help them through it. Awwww.
Indeed, this whole scheme is almost too brutal to contemplate—is it not?— throwing the rich to the vagaries of free enterprise within but two short generations of what formerly could have been eternal endowment. ("Hush, Marie, the less said in public the better," chides Louis, who is equally forlorn, but stiffer of lip.)
Footnote:
A bank head was just sentenced to death for a fraud involving less money than this guy's payout. "Dozens" of former employees of the bank have received long jail terms.
http://www.bbc.com/news/world-...
Now on the one hand, while Vietnam is on one of its periodic anti-corruption sweeps, this is mostly about the guy being a political opponent.
But, really, it's the very idea of the senior officials of a bank showing up in a criminal court at ALL, receiving jail time at ALL (rather than the bank paying a highly-affordable fine) that's the remarkable sight, here. Western culture can offer no comparable example.
... roughly 63 cents for every customer whose data was potentially exposed in its recent security breach.
A customer is someone who purchases a commodity or service. The vast majority of those put at risk by Equifax's fuckup were in no way "customers". Unless they were capable of purchasing EVERYTHING using cash, or opting out of mainstream society and living off the grid altogether, they had no true choice in the matter of whether or not their personal data was under Equifax care. Calling them customers implies that they were partly responsible for their misfortune because in having chosen to deal with an irresponsible vendor; the fact is that they are simply victims of a too-powerful company's careless disregard for its responsibilities and obligations.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
There is NO WAY IN HELL this jackass should be allowed to keep that money, and furthermore he should also have the money from the Equifax stock he dumped confiscated. He clearly waited to tell the public about the breach until after he'd arranged for his 'golden parachute', so I say that should qualify as insider trading. There should also be a criminal investigation. Someone (or many someones) should have their heads on a pike for this. It may be DECADES before the full consequences of the breach are known. The level of negligence involved is practically a crime against humanity.
Since it's likely that $90 mil is linked to the stock price of Equifax, a concerted effort to erode the stock value of the company seems to be in order. Cost the shareholders that supported such a shoddy corporate culture to allow such a breach.
Great minds discuss ideas
Or to put it more intuitively:
Add to that:
The key point here is the income taxes. They're subtracted as the water enters the bucket, before it's turned into wealth. In other words, wealth has already been taxed. If you want to tax rich people, you can accomplish the exact same thing just by raising the income tax rate on rich people (because they control the government).
On top of this, the amount of water in the bucket depends on three factors - income flowrate, expenses flowrate, and how much time this bucket has been there. A wealth tax based on the amount of wealth is a conflation of all three of these factors, and thus cannot distinguish between them. People who've been alive longer would unfairly have to pay more wealth tax. People who've reduced their expenses because they believe in saving up a nest egg would unfairly have to pay more wealth tax. The wealth tax would be lowest (as a percentage) on people who live paycheck-to-paycheck not because they have to, but because they blow their entire paycheck every month on toys, entertainment, and frivolities. I'll repeat - two people with identical incomes can owe very different wealth taxes - the one who saves will owe more wealth tax than the one who spends their entire paycheck every month.
A wealth tax basically says if you act financially responsibly and save up money for a rainy day, you will be punished by owing more taxes. It's an unfair and fiscally irresponsible tax, favored only by people who either don't know better, or deliberately wish to increase society's dependence on government safety nets so they can gain more power.
(Excise taxes, like property taxes, are technically a wealth tax. But they serve as an incentive for people to act fiscally responsibly, not a disincentive. Say someone owns a farm and the surrounding area has become developed into an area of higher economic activity. The increase in his property tax encourages him to find a more economically efficient use of the land than farming, or to sell it to someone else who will. Unless the people have passed a law preventing the property tax from appreciating to reflect increasing value of land. Then the farmer can stick around for decades, using now-valuable land for an economically inefficient activity, driving up costs for all his neighbors.)
Do we not have SOX?
Did he not sell his shares with insider information? Why is he not under indictment?
It's not wealth anymore. Not at the levels of income we're talking about here. You have a point up to about $250-$300k/yr. One you get over those amounts it's not wealth anymore because it's just plain more than anyone can spend, it's power. It's the ability to make everyone do what you say or they die of starvation and/or from lack of healthcare.
You tax income over $1 million at 90% to prevent the accumulation of power into the hands of a lucky few. Otherwise your democracy quickly gives way to oligarchy. Now, if that was you're goal in the first place I can't really argue with you.
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Uhhh....I thought the point of vesting is that if you leave the company before vesting is complete, you lose the unvested amount? So how is it he can leave the company, then let it continue to vest for a few years, and then cash it out?
If only he faced charges in Vietnam.
we had the single greatest growth in middle class incomes in history while the rates were that high. That wasn't a coincidence.
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And get a 90 million dollar bonus. Living the American dream!
Options are cancelled when you quit or are fired. There is no vesting if you are no longer employed. So unfair.
put the fucker in jail.
after they knife him in front of his kids and slowly watch his guts bleed out on live TV.
JAIL!!!
where they can set him on fire while he's still still alive, just to watch him burn and scream.
He should he behind bars!