Merrill paid bonuses early as BofA deal closed- FT

[Joanne98]

Source: Reuters

NEW YORK, Jan 21 (Reuters) - Merrill Lynch paid billions of dollars of bonuses to its employees, three days before completing its life-saving sale to Bank of America Corp (BAC.N: Quote, Profile, Research), the Financial Times reported on its website on Wednesday.

The money was paid as Merrill's losses were mounting, forcing Bank of America Chief Executive Kenneth Lewis last month to seek additional government support for the deal. Merrill's compensation committee agreed to pay bonuses on December 29, at least one month earlier than usual, the paper said.

Yet within days of that committee meeting, the FT said, BofA officials became aware Merrill's fourth-quarter losses would be much greater than expected.

Bank of America, in a statement, told the paper, "Merrill Lynch was an independent company until Jan 1. (Merrill CEO) John Thain decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision."



Read more: http://uk.reuters.com/article/marketsNewsUS/idUKN2150757420090122

[exboyfil]

1. And this situation was not worked out during the due diligence?

I guess BoA doesn't care since they are spending our money.

[salin]

2. Billions of dollars in bonuses?

Tax payer subsidized bonuses. It is as if these folks (board members making these decisions and folks asking for and receiving bonuses) are begging for financial institutions in this country to be nationalized by thumbing their noses and saying "see - if you don't put strings on the billions you give us (of tax payer obligated debt) than WE WILL keep rewarding egregious business practices and behaviors and we will keep taking this money and spending it on ourselves rather than on endeavors to try to ease the credit crisis which was the stated reason for giving the money in the first place.

[.... callchet ....]

3. Obama is worried about raising taxes in a recession.

Rob from the poor and give to the rich, and shame the poor into thinking they will be socialists if they ask for help. It is unbelievable, truly unbelievable how the rich control the poor. "Better dead than red"

[closeupready]

4. If evidence is needed as to how US capitalism has been corrupted, this story is one piece.

The rationale used to be that people at investment banks earned their bonuses based upon performance. Given how horribly Merrill performed last year, this bonus is not only not deserved, but gives the appearance of some kind of graft.

Lawmakers should explore doing some kind of clawback.

[customerserviceguy]

5. Merrill Lynch and Bank of America

are the two most corrupt financial institutions in America. They deserve each other.

While Congress is busy investigating things, maybe they ought to look into the money grab in the last few months with the bailout money. The trail is still pretty hot right now.

[hamsterjill]

6. Any hope at all for recourse?

Dumb question, but is there any hope at all that Obama, et al would be able to do anything about something like this?

Any way they could at least make the SOB's pay the money back? Any hope of any criminal complaints filed?

[RCinBrooklyn]

7. Absolutely outrageous.

[Zenlitened]

8. "Merrill CEO spent $1 million+ to redecorate his office, even as firm faced financial crisis"

From The Daily Beast:

http://www.thedailybeast.com/blogs-and-stories/2009-01-22/john-thains-87000-rug/

In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm, he was also spending company money on himself, senior people at the firm say.

(snip)

Big ticket items include: $87,000 for an area rug, four pairs of curtains for $28,000, a pair of guest chairs for $87,000 and fabric for a "Roman Shade" for $11,000.

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs curtains for $28,000; a pair of guest chairs for $87,000; a "George IV Desk" for $18,000; 6 wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of farbric for wall panels," for $5,000 and a "parchment waste can" for $1,400.

The documents also show that Thain signed off on the purchases personally.

[Career Prole]

9. Former Merrill Lynch CEO John Thain just got the boot.

Thain resigns from Bank of America

NEW YORK – Wall Street bonuses, a sore point as the government gives billions of dollars in bailout money to the financial industry, have apparently cost former Merrill Lynch & Co. CEO John Thain his new job at Bank of America Corp.

Thain resigned from Bank of America Thursday following news that Merrill Lynch had rushed out its year-end bonuses, paying them just before Bank of America completed its acquisition of Merrill Lynch and sought $20 billion in additional

The company gave no reason for Thain's departure, but its timing, coming hours after news reports about the bonuses, made it likely that there was a connection with the payouts.

Join the unemployment line, asshole.

[ThomCat]

10. No matter how bad things get, the rich must always get richer.

x(

But fuck the poor. :grr:

We really need to find a way to reverse that.

[jillan]

11. f-ck f-ck f-ck f-ck

I retired from B of A 2 years ago....

I worked my ass off for them and built up a nice pension.
:cry:

I'm so screwed.