You know how Merrill Lynch recently lost $15 billion? Remember how we're in a unbelievably huge global financial crisis that threatens to unravel the fabric of our economy? John Thain says that's no reason not to pay billions of dollars in bonuses.
NY AG Andrew Cuomo is seeking to force John Thain, former CEO of Merrill Lynch, to release the names of the Merrill executives who shared over $3.6 billion in bonuses before the merger with Bank of America. Thain is refusing, and said this about the bonuses:
"Bonuses were determined based upon the performance and the retention of people, and there is nothing that happened in the world or the economy that would make you say that those were not the right thing to do for the retention and the reward of the people who were performing," Thain said, according to the transcript.
Mr. Cuomo's office recently released information that suggests that Merrill Lynch may have moved up the bonuses in order to pass the cost on to tax payers, and claims that the bonuses were not spread evenly throughout the organization — but were structured in such a way as to enrich the top Merrill executives. Cuomo says that the top four bonus recipients received a combined $121 million, and that 696 individuals received bonuses of $1 million or more.
Cuomo said the bonuses were set Dec. 8 and not adjusted later when it turned out pretax losses were $7 billion more than expected. Merrill reported Jan. 16 that it lost $15.31 billion in the fourth quarter and $27 billion for the year.
Thain was dismissed in January by Bank of America chief executive officer Kenneth D. Lewis. The move came after disclosure of the bonuses and Merrill's unexpectedly large fourth-quarter loss.
Cuomo Seeks to Force Thain to Reveal Merrill Bonuses (Update2) [Bloomberg]
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