The CEO of Merrill Lynch is Requesting a $10 Million Dollar Bonus
John Thain, CEO of Merrill Lynch, has requested a $10 million dollar bonus from the Merrill Lynch compensation committee, the Wall Street Journal is reporting.
The compensation committee and the entire board of the company are set to meet on Monday to determine whether or not to award this bonus to Thain. The WSJ says that the compensation committee is "resisting".
The article also points out that the original proposal sent to the compensation committee a "few months ago" requested that Thain receive $30 million dollars for the year, but that this number has since been pared down to $10 million dollars.
Thain took over the reins of the company in late 2007. At the time, Merrill Lynch was trading at well over $50 per share. The company suffered heavy losses due to the subprime mortgage meltdown, and was forced to sell itself to the Bank of America. The deal was just recently approved by shareholders of both companies.
The argument that Thain will be making is that his quick action in securing a deal with Bank of America saved the company from a possible collapse, saving tens of thousands of jobs and billions of dollars in market capitalization.
Those who are against the bonus point out that Goldman Sachs fared better than Merrill Lynch this year, and their main executives won't be accepting bonuses. They also point out that Merrill Lynch's shareholders still suffered greatly in 2008, and that the awarding of a $10 million dollar bonus would be highly inappropriate, even if Thain did in fact negotiate a quick buyout that may have saved the company.
On top of that, awarding such a lucrative bonus would be a horrible PR move for the company.
Bank of America representatives apparently had no comment, remarking that Merrill Lynch was still an independent company (for the time being) and could do whatever they wished.
We'll be keeping an eye on this story as it develops.
Source: WSJ.com - Thain Spars With Board Over Bonus at Merrill
Filed under: General Market News