American Home Mortgage Investment Corp. filed for bankruptcy last week, one of the biggest casualties yet of the great mortgage meltdown.
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But don’t feel sorry for the company’s top execs. When there was hay to be made, they made it.
AHM paid its top five officers more than $7.5 million in bonuses for their work in 2006. More than $5 million of that was paid early this year, a company filing shows.
Robert F. Johnson Jr., an executive vice president, received almost $3 million in bonuses, about 10 times his annual salary, according to the company’s 2007 proxy statement, dated May 18. His bonus was $300,000 more than that of CEO Michael Strauss.
Johnson, of course, had an important job. He was in charge of selling AHM loans to third parties, spreading the risk, and now the pain, of the company’s mortgage business. AHM was among the nation’s top 10 ten home lenders.
Based on results of the fourth quarter of 2006 alone, Johnson, at 34 the youngest executive officer of AHM, earned a bonus of $600,000, twice his annual salary.
If it looks bad for those bonuses to be paid just months before the company is liquidated, how about the CEO’s stock sale?
On Aug. 1, just days before he told the company’s 7,500 employees that most of them would lose their jobs, Strauss sold nearly 3 million shares of company stock at an average price of $1.17, according to a filing with the SEC, netting about $3.5 million.
After last week’s bankruptcy filing, the stock was de-listed. It last traded at 44 cents.
Maybe you can feel sorry for Strauss after all. In December, those same shares were worth $100 million.
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