Thursday, December 18, 2008
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 … WASHINGTON (AFP) – Troubled US bank Merrill Lynch said chairman and chief executive John Thain has withdrawn his request for a bonus this year amid rising public anger Wall Street's role in the country's financial crisis.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!)