The latest FTX CEO gets spent $1,300 an hour, and clients will pay the invoice

December 16, 2022: FTX CEO John J. Ray leans on a team that he has grown to know more than years of insolvency restructurings, and the firm is paying them millions for the work they’re doing to unpack FTX’s mixed morass of accounts and shoddy records.

Ray and his top team are different from typical employees who work directly for the firm. Instead, like bankers and lawyers working on the bankruptcy proceedings, the recent leadership team is professional independent contractors. That means, among other things, they get paid before any FTX investors get compensation for their losses.

According to court filings, the recent FTX CEO collecting $1,300 hourly plus “reasonable expenses” for his untangled what U.S. Attorney Damian Williams calls “one of the significant frauds in American history” in a conference of the news. That is working out to an annualized $2.6 million, which assumes Ray is working a standard 40-hour workweek for 50 weeks more than a year, which allows for two weeks of unpaid vacation.

In every bankruptcy case Ray worked on, he billed over 156 hours in two months, netting him $120,582, so billings for FTX may run higher or lower.

By comparison, when Ray led Enron through its fraud recovery process in 2005, which helmed the energy firm through part of its bankruptcy as chairman and CEO, he is then collecting a more modest $1.2 million annually.

Ray also has a close-knit team working with him on nearly three bankruptcies throughout the previous three decades, including restructuring Enron in the nearly 2000s, Nortel in 2009 and Overseas Shipholding mixing in 2014.

LKS charges $975 an hour for every person, or $5.85 million annualized, for these three leaders, who are contracted through RLKS Executive Solutions. This company specializes in bankruptcy officer hiring. The leaders from RLKS oversee administrative, financial and information technology efforts, a key part of creating what Ray has called “an utter collapse of corporate controls at every level.”

The total for all four officers runs $4,225 an hour, or $8.45 million annualized.

FTX has recovered $1 billion in assets, but it could be years before creditors are made whole. Enron dragged on for more than a decade. Nortel’s proceedings are still in 2022, over 11 years later.