Just when it seemed impossible for the image of Wall Street executives to sink any lower, now hear this: The Financial Times reports that Merrill Lynch CEO John Thain sped up bonus payments to staff at the end of 2008, even as the brokerage’s losses were deepening.
From the Times:
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery program to help close the deal.
Merrill and BofA shareholders voted to approve the takeover on December 5. Three days later, Merrill’s compensation committee approved the bonuses, which were paid on December 29. In past years, Merrill had paid bonuses later -- usually late January or early February, according to company officials.
Thain, who had intended to stay on at Merrill, resigned today.
The U.S. Treasury last week announced a capital infusion and loan guarantee plan worth $138 billion for Bank of America to bolster the company’s finances in the wake of the Merrill’s losses, which totaled $15 billion in the fourth quarter.
New York Atty. Gen. Andrew Cuomo has decided to investigate the bonus payments, Bloomberg reported today.
BofA told the Financial Times: "Merrill Lynch was an independent company until January 1, 2009. John Thain decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision."
-- Tom PetrunoPhoto: John Thain. Credit: Richard Drew / Associated Press
Comment:
That Thain and Lewis turn out to be less than mythical, indeed, actually pedestrian in their lack of vision attributable to great heads of state and titans of commerce...is testament to their facade of competence and the folly of their remuneration.
Whether it be Thain's mergers and acquisitions..such as Euronext, and his engendering of animosity and destroying of ML old hands' morale by luring old Goldman buddies with obscene packages of dough...not to mention his dilution of stockholder equity...to Lewis' insatiable quest for personal grandeur via acquisitions, sans adequate diligence (read management blunder), these two wolves in wolves clothing deserved each other.
Greek tragedies originated from a pagan form of religion, the ancient Greek word 'tragedy' meant 'goat song'...and the ritual culminated in the slaughter of the goats. So should it be today.
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