I heard about Merrill Lynch CEO John Thain’s shameful display of greed this morning, but I must say I am certainly not surprised by his actions. Despite losses of $11 billion and 30,000 lay-offs, Thain is seeking a $10 million bonus. How selfish. Well, his move has prompted NY Attorney General Andrew Cuomo to reach out to the firm’s board of directors urging them not to grant the “shocking” payment to Thain in light of the firm’s “abysmal” performance. That’s the problem with Wall Street. The CEOs of the big companies are being rewarded for poor performance.
Cuomo’s office fired off a letter to Merrill’s board this morning after the Wall Street Journal reported that Thain has suggested to the board of the financial giant that he should be awarded a bonus during a year in which 30,000 Merrill employees were laid off.
Cuomo reminded Merrill that it had informed his office on November 5th that any bonus would be based on performance and executive retention needs. By that measure, Cuomo said, “utilizing Merrill’s own criteria, a bonus of this size appears unjustified.” Source: ABC News
Not only was Merrill Lynch’s performance under Thain horrible, the company ended up being sold to Bank of America Corp. and he wants a $10million bonus? He has lost his mind.
Thain joined Merrill as CEO in 2007 when the firm was already in trouble and received a $15 million signing bonus before he began a top-to-bottom review of the company. His salary is $750,000 a year.
Merrill has managed to stay afloat through the banking industry crisis in a large part because of the merger Thain engineered with Bank of America, according to attorneys who have examined the firm’s financials. The merger was approved last week by shareholders for both institutions.
But a key underpinning of the deal is the $15 billion in public funds that the Treasury Department provided BofA and $10 billion offered to Merrill that it is expected to accept once the merger with BofA is completed. As such, any bonus to the firm’s CEO would be “a thumb in the eye” of taxpayers, Cuomo said.
“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. Indeed, Merrill’s decision to be taken over by Bank of America seems to have been the only thing that saved Merrill from collapse,” Cuomo said. “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.” Source: ABC News
I thought the financial mess on Wall Street and in the economy jarred people like Mr. Thain to reality, but I guess a leopard can’t change its spots. Of course, this climate of greed has been festering on Wall Street for decades and it finally caught up with us. The problem is everyone is being affected by this avarice and the fallout that has resulted in the worst economic collapse in America’s history, expected to surpass even the Great Depression.
Filed under: Andrew Cuomo, Bank of America, John Thain, Merrill Lynch, Performance bonus
Black Political Thought 