A crumbling Merrill rushed billions in bonuses out a month early - $BAC

Despite massive losses last year, and more huge losses in December, John Thain accelerated billions in bonuses by a month (which apparently amounted to $3-4 billion) presumably so they'd be paid before they merged with Bank of America.  Merrill, a private company until 1/1/09 would have normally paid out the bonuses at the end of January.  But would all of that cash have been allowed out the door given what we know now and given their additional $20 billion emergency TARP loan?  We suspect not.  When you top it off with the reports that Thain contemplated requesting a $10 million bonus for all of his good work (he wisely didn't make the request), it's pretty repulsive. His decision to push the bonus payment date up smells really bad.   According to the Financial Times:

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.

Within days of the compensation committee meeting, BofA officials said they became aware that Merrill's fourth-quarter losses would be greater than expected and began talks with the US Treasury on securing additional Tarp money.

Nancy Bush, an analyst with NAB Research, described the size of the 2008 Merrill bonus payments as "ridiculous".

BofA said: "Merrill Lynch was an independent company until January 1 2009. John Thain (Merrill's chief executive) decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision.".

Thain AND Lewis both need to go.

Merrill paid bonuses as losses mounted ahead of sale to BofA - Financial Times

Comments

[ABC]

Government should ask for that money given as bonus back! Enough Wall Street crooks mocking American tax payers!

Enough is enough!!