Dec 8, 2008 2:00 pm US/Eastern
WSJ: Merrill Lynch CEO Wants $10M Bonus For 2008
Wall Street Investment Banks Weighing Executives' Bonuses
NEW YORK (AP) ―
-
-
Merrill Lynch's Chief Executive John Thain. (File)
AP
Wall Street bonuses are up for debate this month, with the boards of Merrill Lynch & Co. and Morgan Stanley weighing how much to pay their top leaders amid a climate of bank failures, thousands of layoffs and an economic recession.
The CEO compensation debate comes as global banks have lost billions of dollars amid a credit crisis that still has yet to be contained. In the last few months, major U.S. banks have taken advantage of a $700 billion government bailout program to help them avoid fates similar to that of storied investment bank Lehman Brothers Holdings Inc., which declared Chapter 11 bankruptcy in October.
Merrill Lynch's board of directors is meeting Monday to discuss how much money Chief Executive John Thain will receive. Though it isn't known what Thain's recommendations are for bonuses for his top staff, The Wall Street Journal reported that he may have asked for as much as $10 million for himself in 2008.
A spokeswoman for Merrill Lynch declined to comment.
Merrill shareholders on Friday approved the brokerage's acquisition by Bank of America Corp., creating the nation's largest financial services company. Thain ushered through the combination in September at fire sale prices to avoid a collapse similar to that of Lehman Brothers.
The potential of Thain receiving such a high bonus was the target of criticism by New York State Attorney General Andrew Cuomo, who said in a letter to Merrill's board that such a bonus would be "unjustified." He is conducting an ongoing inquiry into executive compensation at Wall Street firms.
"In terms of performance, Merrill has reported losses for every quarter this year and has lost more than $11 billion for the year as a whole," Cuomo said in the letter that was obtained by The Associated Press. "Indeed, Merrill's decision to be taken over by Bank of America seems to have been the only thing that saved Merrill from collapse. Clearly, the performance of Merrill's top executives throughout Merrill's abysmal year in no way justifies significant bonuses for its top executives, including the CEO."
Once the takeover is completed, Thain will be in charge of the combined company's global banking, securities and wealth management businesses. He won't join BofA's board.
Thain joined Merrill Lynch in 2007 after serving as CEO of the New York Stock Exchange. He got a $15 million bonus when he joined the brokerage.
Meanwhile, early next week Morgan Stanley is set to determine the size of the bonuses its top executives will receive. The board is expected to address how much CEO John J. Mack, who did not receive a bonus last year, might deserve this time around.
A spokesman for the company would not comment on Mack's compensation. Employees at Morgan Stanley were notified on Monday about promotions for next year, and next week will find out if they received a bonus for 2008.
Goldman Sachs CEO Lloyd Blankfein — and six of his top lieutenants — announced last month that they won't take cash or stock bonuses for 2008.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Timeline: U.S. Credit Crunch & Financial Failures
Click to enlarge
1 Missing After Boat Capsizes In Bucks County 6 mins ago
Brush Fire Consumes Nearly 500 Acres In South NJ 39 mins ago 
Stumble It!
Comments