FT: Almost 700 Merrill executives paid $1m-plus bonuses

[jordi_fanclub]

Source: Financial Times

Nearly 700 Merrill Lynch executives had cash bonuses of more than $1m each for last year, New York’s top law enforcement official disclosed on Wednesday.

Andrew Cuomo, New York’s attorney-general, called the bank’s decision to bring forward nearly $4bn of pay-outs a “surprising fit of corporate irresponsibility” that raised “serious and disturbing questions”.
(...)
After the $121m paid to the top four, the next 10 recipients took home $128m in incentive pay, while the top 149 bonus recipients got a total of $858m. The fact that Merrill paid out billions in bonuses at a time when Mr Lewis was asking for $20bn in government funds to complete the acquisition has generated outrage over the alleged use of bank rescue funds to reward Wall Street executives.

In all, Mr Cuomo determined that 696 employees of Merrill Lynch received a bonus of at least $1m (each) for the year.

Read more: http://www.ft.com/cms/s/47bbde10-f872-11dd-aae8-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F47bbde10-f872-11dd-aae8-000077b07658.html%3Fnclick_check%3D1&_i_referer=&nclick_check=1

[MinneapolisMatt]

1. Disgusting.

I wish I could go to my job, make it worse than I found it, and get a bonus.

[fasttense]

2. I thought bonuses were called retention awards now. n/t

[Wapsie B]

3. Why does this not surprise me?

And all 696 added that much value to the company to merit 7 figure bonuses? And then to ask for a handout from the government on top of all this is a prime example of upper class arrogance. Screw the little guy any way you can.

[WillYourVoteBCounted]

4. cause they did such a good job

yeh

[WillYourVoteBCounted]

5. former CEO of Wachovia got $20 mill plus while laying off thousands and making bad choices

Ken Thompson made choice that got Wachovia heavily invested in bad loans,
and Wachovia almost went bankrupt.

He created a mess when he laid off thousands of employees.

[OwnedByFerrets]

6. Words cannot express my anger at this crap!!

[Algorem]

7. Move to Russia,commie.

[Baby Snooks]

8. But they broke no laws and don't care what the public thinks...

And you know what? Congress doesn't care what the public thinks either. Congress serves Wall Street. Not Main Street.

[AngryAmish]

9. If one has a contract that says I get paid $X if I make Y in profit...

and one makes Y+, your employer has to pay you. If not, it is breach of contract and the bank will get sued.

[hobbit709]

11. But when you lose Z in losses and go ask for a handout

[AngryAmish]

12. And if these workers had nothing to do with the losses?

Say person Y worked in municipal bonds, essentially as a salesman to underwrite these bonds. I think they had nothing to do with this crisis.

Hey, I am not saying the mortgage-bond underwriters, et al should get their bonuses. I am just saying that there are a lot of people in the financial industry that did not cause this and have valid contracts. You can't just tear up a contract because you are mad at part of an industry. You will get screwed in court (and many states allow punitive damages, attorneys fees, treble damages et al. for people who renege on employment contracts).

[hobbit709]

14. If Merril-Lynch could pay $4billion in bonuses

then they should have made enough money in those departments to offset ANY losses in the others. That obviously didn't happen.

[Earl Grey]

15. This is just another example of how Wall Street doesn't

believe they answer to anyone. They lost billions of dollars for their customers and shareholders, ran their company into insolvency, borrowed billions from the taxpayers, then sold out to Bank of America for 39% of the value their company held a year earlier. Yet, they still feel they deserve bonuses.

I will grant you that a few of the recipients may have led successful divisions, but 700 of them?

$128,000,000 to the top four executives?

That's nothing but greed, arrogance, and sense of entitlement.

[ljm2002]

32. Welcome to DU! n/t

[tridim]

19. Should a bond salesman be making a million plus salary?

Do they produce anything? Do they work harder than an assembly line worker making $10/hr?

Maybe that's why all these banks are failing? They pay their grunts at least 10 times what they are worth, not just this year but every year.

[AngryAmish]

20. My point is you can't cut contracted for wages after the fact

A company will get sued for that.

[Hannah Bell]

29. Unless they go bankrupt, which ML essentially did. Gee, GM & other corps seem to have no trouble

cutting contracted benefits promised to their pensioners, etc. as part of their original wage compensation package.

I guess it makes a difference if said employees are in the top 1% or the bottom 99%.

400 people out of 45,700 total employees got 4 billion - it's not even clear ML *made* 4 billion in '08. By 3rd gtr '08 they had total revenues of $834 MILLION. Where'd the 4 BILLION come from?

http://ir.ml.com/quick.cfm?section=netrevenue

[No Elephants]

37. Did these contracts exist or not? If there were 700 contracts to pay

$1million a piece in bonuses, even if the company went bankrupt, whoever authorized those contracts should be strung up.

[No Elephants]

38. The million was only a bonus. They all got salaries, too.

[No Elephants]

36. Did these contracts exist, or are you assuming 700 contracts to pay $1million bonuses, even

if the company is losing money?

[whopis01]

22. You are correct, and it may not be possible to correct past mistakes

but something must be done to prevent this from continuing in the future.

Clearly, if a company is being run into the ground, there should not be tons of bonus payments being handed out. My guess is that the contracts were written such that the requirements to obtain the bonuses were not really well tied to the success of the company. For example (and I am just making this up here) it could have been tied to one particular measurement, and the person getting the bonus may have done everything possible to make that one measurement look good while doing this detrimental to the company as a whole. Like a mortgage broker getting a bonus based on the number of mortgages written, with no concern as to the quality.

Going forward, if the public has any stake in the company (i.e., it received bailout money) all future bonus contracts need to be examined in great detail before they are signed to prevent this from ever happening again.

[Hannah Bell]

27. 4 billion in bonuses. Where's the equivalent profit? Oh, right, they went under.

Gee, I wonder if paying 4 billion in bonuses alone to .87% of its employees (400/45,700) had something to do with it.

In 2007, ML had 45,700 employees world-wide. Here are their net yearly revenues in millions:

2008 (Quarters) $2,934 $(2,116) $16

2007 $11,250

2006 $33,781

2005 $25,277


Let's see, bonuses to top 1% of employees = about 1/3 of 2007 revenues.

Great business plan.

http://ir.ml.com/quick.cfm?section=netrevenue

[No Elephants]

35. Are you assuming contracts to pay these bonuses, or do they exist?

[AngryAmish]

41. I'm assuming

The way the people I know in the financial industry have either written contracts or handshake agreements that they get paid x of what they make for the company (and I must say I know no one at these people getting bonuses in these Wall Street firms, mostly CBOT, CBOE etc. guys.)

Anyway, they get a smallish salary and a biggish bonus. The idea is to incentivize the person making the trades, checking the books etc.

[leftchick]

10. ain't capitalism grand?

I am now going to refer to myself as a socialist. With pride.

[krabigirl]

13. the public doesn't care. They are obsessed with the stupid octuplets case.

[Hannah Bell]

28. Well, it *is* much more important to castigate someone who might get $535 combined state/federal

aid per child (but no foodstamp eligibility if you take the state aid) than to worry about the 1% of ML employees who got 4 BILLION in bonuses on *maybe* 4 billion in total 2008 revenues.

I mean, really, there's no comparison in the level of corruption. She *purposefully* implanted herself with *children*!!!!

http://ir.ml.com/quick.cfm?section=netrevenue

[The Stranger]

16. Didn't the lying whore U.S. media attack Obama's executive compensation limitation saying that it

"would only affect a handful of people"?

[Tyrone Slothrop]

21. They were right apparently

If it doesn't affect these 700 folks at Merrill...

[The Stranger]

23. Maybe I missed something, but if Merrill had been receiving funds, it would have affected them.

If they want to receive the taxpayer's funds and work for the taxpayers, the billionaires making millions each year will have to start cutting back.

[1776Forever]

17. Bush took care of his "base" to the end - The bastard! Disgusting!

Sick - Deprived - :argh:

[Festivito]

18. Can you say: "Hush money?"

Thought you could.

[DCKit]

24. Any company with 700 executives is too big to exist.

Time to break some shit up.

[harun]

40. I keep coming back to the same thought.

It seems we need to start saying no, much more, to companies buying other companies ad infinitum.

Start with something like, no company with an annual market cap averaging over 100 billion can buy another company. Then adjust from there.

[BrightKnight]

25. Apparently specific executive plundering/ embezzlement laws are needed.

As a share holder I am really pissed. Given the scale of the "irresponsibility," perhaps they can be prosecuted with existing laws. How is this not racketeering?

[Hannah Bell]

26. 4 BILLION DOLLARS in "BONUSES"? Bullshit. Try "bankuptcy for profit".

[Hannah Bell]

30. If 4 billion was paid out to 700 people, average "bonus" = over 5 mill.

over 5.7 mill, to be more precise.

Merril's 2008 revenues?

about 800 mill as of Q3 2008.

http://ir.ml.com/quick.cfm?section=netrevenue

[mitchum]

31. Up against the wall motherfuckers

[radfringe]

33. here's how I see it:

You are walking down the street, a drunk comes up and asks you for a few dollars so he can get something to eat. You give him a few dollars, and then watch as he goes into the nearest liquor store and buy a bottle of booze - WITH THE MONEY YOU JUST GAVE HIM TO BUY FOOD

How likely are you to give him another few dollars tomorrow?

well - that's what the wealthy-fareists of wall street did to us. They asked for a few dollars to help them out of a financial mess - we gave it to them. They took that money, ran into the nearest liquor store and walked out with more than a few cases of top shelf champagne.

[Pooka Fey]

34. God, my ass hurts.

[harun]

39. Wow, that is much worse than I thought. Egregious irresponsibility.

[IDFbunny]

42. Is this why we support TARP?