Merrill chief Thain withdraws request for bonus

Merrill Lynch Chief Executive Officer, John Thain, poses before a news conference in Mumbai May 7, 2008. … WASHINGTON (AFP) – Troubled US bank Merrill Lynch said chairman and chief executive John Thain has withdrawn his request for a bonus this year amid rising public anger Wall Street's role in the country's financial crisis.

Thain, who took over Merrill Lynch a year ago, had reportedly suggested to company directors earlier that he be paid as much as 10 million dollars for his 2008 bonus even as the firm welcomed 10 billion dollars in federal assistance.

But at Monday's Merrill Lynch board meeting, Thain "requested that he receive no bonus for 2008" and four other executive officers made the same request saying it was the right step "given current economic and market conditions," the company said in a statement.

The company's compensation committee had been reluctant to grant Thain a major bonus, the Wall Street Journal reported Tuesday.

Morgan Stanley also has decided not to pay generous bonuses to its chief executive John Mack or some other top managers as the company struggles to recover amid layoffs and government aid, the Journal wrote on Tuesday. In addition, Morgan Stanley planned to slash compensation for the firm's top 35 executives by about 65 percent.

News report place Thain's annual salary at 750,000 dollars. He also reportedly received a 15 million dollar signing bonus when he was hired as Merrill Lynch's CEO last December, along with a pay package valued at between 50 million dollard and 120 million dollars over several years.

Senate Majority Leader Harry Reid had condemned Thain's bonus request, saying the government's 700-billion-dollar bailout for Wall Street was designed to limit executive compensation and bonuses.

"While American families struggle to keep their jobs and their homes, I question the chutzpah of asking for a 10-million-dollar taxpayer-subsidized bonus," Reid said.

Merrill Lynch was forced to sell itself after making huge losses following the meltdown in the subprime, or higher risk, US mortgage market.

The acquisition of Merrill by Bank of America for 50 billion dollars averted a possible collapse of the 94-year-old company, saving shareholders billions of dollars and saving many jobs.

Other Wall Street firms, including Goldman Sachs, were also eliminating bonuses as the country faces the worst economic crisis since the Great Depression.

THEY EVEN HAD THE NERVE TO EVEN DEBATE WHY HE SHOULD RECIEVE THE MONEY (WOW!)

Jim Jubak: The Retirement Crisis

Can Social Security Survive?

Ladies and Gents,

This is why the Money & Music Movement was created. The politicians, Big Corporate Bailouts, lack of education amongst the public, are all to blame. The time is now to begin the education process, to work with an expert and educate ourselves for our future. Cars are not an investment, Clothes are not an investment, Bar Tabs surely are not investment, unless we as a whole begin to educate ourselves and start doing the right things for our future, many of us may end up with those same clothes, living out of that same car, wishing those dollars so freely spent at the club were available for a cup of coffee, 2041.

Enjoy the reading!!

Can Social Security Survive? Retiring Minds Want To Know. Here Are Some Educated Guesses


Copyright 2008 Consumers Union of U.S., Inc.All Rights Reserved
Consumer Reports Money Adviser

December 2008

SECTION: Pg. 15 Vol. 5 No. 12

LENGTH: 802 words


HEADLINE: RETIREMENT GUY. CAN SOCIAL SECURITY SURVIVE? Retiring minds want to know. Here are some educated guesses.



Two Social Security-related questions seem to be on many minds these days: Will the program still be around when I retire? And will I get everything I have coming from it?

Nobody knows for sure, of course, but allow me to venture a couple of educated guesses, based on talking with experts and plowing through a pile of recent academic papers. To the first question: Probably. To the second one: Maybe, but I wouldn't bet my retirement on it.

There's no denying that the Social Security system has some problems, chief among them its ability to take in enough money to meet its future obligations. By the year 2041 payroll taxes will be sufficient to cover only 78 percent of promised benefits, according to the most recent report from the program's trustees.

Nonetheless, I've not heard a single credible expert propose that the U.S. do away with the system. Even privatizing it, the next worst thing in the opinion of many of us, seems far off the table these days. So I think we can reasonably assume that Social Security will still exist in some form, at least for those of us old enough now to be concerned about it.

But for the system to survive, it will either have to bring in more income or slow its spending. That could be done by raising taxes, reducing benefits, delaying the age at which we become eligible for benefits, or some combination of these.

My money is on delaying eligibility, which seems the most politically palatable option. And if we can get past the fact that it would mean reneging on a promise made to many of us from the day we first started paying into the system, it even has some logic to it.

A working paper published this summer by the National Bureau of Economic Research (NBER) frames the argument this way: When the Social Security system started in 1935, the average 65-year-old retiree had a life expectancy of 12 more years; by 2004, that was up to 19 years. In other words, a system designed to support someone for a dozen years of retirement is now expected to do it for nearly 20.

The NBER calls this "age inflation" and goes on to calculate how eligibility ages might have been adjusted over time had that been taken into account. It concludes that the earliest age at which retirees can collect benefits, now 62, would have risen to between 65.6 and 67 by 2004. Normal, or "full," retirement age, now 66 to 67, would have risen to between 73 and 81.8.

This kind of thinking is likely to give Congress the cover it needs to consider fiddling with the eligibility ages. The politicians even have some precedent on their side. In 1983, the eligibility age for full benefits, long set at 65, was raised for those of us born after 1937, to its current range of 65 and two months to 67. WHAT IT MEANS TO YOU

If you're already retired or within a few years of it, I would guess that changing the eligibility ages won't affect you much. It's hard to imagine that Congress would act that quickly or cause such havoc in the lives of a cohort known to vote in substantial numbers. But if your retirement is decades off, be forewarned.

Some other ideas for pre-retirees:

* Know your best-case scenario. Because Social Security is unlikely to become more generous in the years ahead, consider the eligibility ages and benefit amounts it currently projects for you as the best you'll see and adjust your expectations down from there. You'll find your projected benefits in the statement Social Security sends out each year about 90 days before your birthday. Or you can use the recently unveiled online calculator at www.ssa.gov/estimator.

* Re-slice your pie chart. Most readers of this newsletter probably aren't looking to Social Security as their sole source of retirement income. It may be just one slice of your retirement pie, which could also include a traditional pension, a 401(k) plan, IRAs, non-retirement investments, and so forth. But consider what would happen if the Social Security slice were to get even smaller. You'd need to adjust your budget and plan to live on less, or start saving more aggressively.

* Think about your timing. Surveys have shown that many of us intend to postpone retirement and work longer. That's a good thing, because we may have no choice in the matter. If your dream is to retire at, let's say, age 62, you'd better plan on making that happen without early Social Security benefits, which may not be available to you until several years later.

Another reason to continue working, if you can, is to stay on an employer's health plan. Though you're currently eligible for Medicare at age 65 regardless of your "full" retirement age, that could be up for debate too. In fact, the NBER paper also adjusted Medicare for age inflation, calculating that as of 2004, people would have become eligible at ages 70 to 72. So try to stay healthy, and stay tuned.

LOAD-DATE: November 26, 2008

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