Final answer:
Executives illegally benefit financially from their companies by manipulating financial statements, a form of corporate crime. They may also engage in price setting and market carving to boost profits. Failures in corporate governance, like in the Lehman Brothers case, can lead to insufficient oversight, allowing such practices.
Step-by-step explanation:
Executives may illegally loot their companies to receive large financial benefits primarily through manipulating financial statements, which is a form of corporate crime. This can be done by overstating assets, understating liabilities, or recognizing revenue prematurely. These actions are taken to deceive investors and regulatory bodies, allowing executives to benefit through bonuses, stock options, or other forms of compensation based on the falsified financial performance of the company. Price setting and market carving, despite being illegal, are also sometimes practiced in an attempt to boost profits and, by extension, executive gains. The case of Lehman Brothers serves as a stark reminder of how failures in corporate governance can lead to inadequate oversight of top executives, enabling them to execute unscrupulous actions that can be financially detrimental to the company and its stakeholders.