Headline June02,2012/$16 billion bonus babies


Respectful dedication Economist Gregory Mankiw/Harvard - Philosopher Albert Camus -
Author William Safire

 Prof Gregory Mankiw
 Albert Camus
 William Saphire

Let me delight you with a soft note while I warm up. In 2007, Ex Merril Lynch CEO John Thain received a $15million signing bonus!! While predecessor E Slanley O Neil received $87million as compensation in 5 years !! But hold, let me rework all this into a delightful content.

On December 8, 2008, the Wall Street journal reported that John Thain, the 53 year old chairman and CEO of Merril Lynch had let it be known he wanted a $10 Million Bonus. But then why not?

After all, Thain had made the brutally pragmatic decision , over the mid-September weekend that changed Wall Street forever, to sell the 94 years old firm to Bank of America for $50 billion, averting the bankruptcy that awaited LEHMAN BROTHERS that Monday and saving Merrill's shareholders billion of dollars. Surely, even in a bad year he was entitled to the equivalent to a 25 cent tip on the deal !!! Was he not?!! Haha!

But the directors balked. Wouldn’t that send the wrong signal after Merill’s net losses for three quarters of $11.67 billion !! Specially after Bank of America had taken $15billion of Federal bale out 

money and was due to take the $10billion ear marked for Merill as well ? When as many as 30,000 jobs may be lost from this acquisition?

The same day came a scathing letter to the board from New York attorney general Andrew Cuomo. Soon after, a grim Thain walked into Merrill’s board room and apparently told the directors he’d had a change of mind : No bonus for him, thank you.

Thain had gotten the message at last: bonus season would be different this year. At least, it would have to look different.

Only a year before, Wall Street’s financial firms had passed out $33.2 billion in bonuses – down a mere rounding error from $33.9 billion bestowed in 2006 – even as the credit crisis had spread and $74 billion in shareholders equity went POOF !!! But now one firm after another had teetered or collapsed

Thanks to !WOW!. Don't miss morrow's post as the drama unfolds.

Good night and God bless! 

SAM Daily Times - the Voice of the Voiceless


Post a Comment

Grace A Comment!