How CEOs steal from your 401(k)

News Type: Opinion — Seeded on Thu Mar 5, 2009 6:39 AM EST

Article Source: MSN

business, news, money, corruption, fraud, ceo, 401-k

At KB Home these days, Karatz's replacement, Jeffrey Mezger, presides over a mess. The real-estate market has collapsed, as has the company's stock price. A KB Home shareholder who bought $1,000 worth of shares five years ago has seen their value slip to around $290.

Mezger, like his predecessor, is also entitled to a portion of KB's pretax, pre-incentive-pay profits. But the company posted a $929 million loss in fiscal 2007, so this bonus amounted to nothing.

The CEO is still OK, though. His board awarded him a "discretionary" bonus of $6 million, and he ended up with total compensation of $16.4 million for the year.

In 2008, KB's board created a new standard for Mezger's performance awards, promising he'd get as much as $10 million if he just kept the company's losses below $300 million, according to documents filed with the SEC on Friday. KB's loss widened to $976 million in 2008. Mezger walked away with $9.6 million, including a $2.7 million bonus and $4.6 million in stock.

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doc4600

I need a job like that

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#1 - Thu Mar 5, 2009 6:41 AM EST

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DOC4600

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How CEOs steal from your 401(k)

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