The F Word: Raising Thain?
Merrill Lynch CEO John Thain wants an end of year bonus. He’s seen his bank through some hard times, he says, and saved company jobs by deciding to sell Merrill to Bank of America. Merrill Lynch’s stock price (which he was hired to pump up) is down: from over $50 a share when he came on board, to $13.04 at Friday’s close of market. Still, Thain thinks he’s done a good job, and recession or no recession, has asked his board for a $10 million bonus.
Thain already receives $750,000 in annual salary, not including benefits. He scored a $15 million cash bonus when he signed with Merrill last year. It’s hard to believe he’s burnt through all that but nonethelss, he’s pitching for his reward. And some think he deserves it. After all his proposal’s shrunk dramatically (down from over $30 million, reports the Wall Street Journal.)
Will Bank of America (now Merrill Lynch’s owners) approve $10 million extra to Merrill’s CEO even as they’re cutting off credit to companies like Chicago’s Republic Windows? It’s not clear that BoA’s board has to approve. But it makes you think.
Merrill Lynch wasn’t bailed out, it was bought up, by Bank of America — which then in turn received $25 billion from the Fed. Congress could have demanded a seat on the board of companies they help (if they had, we the taxpayer, via Congress, might have had a say in compensation cases like this.) As it is, the boards will decide without us. But Merrill Lynch and Bank of America should be prepared to hear from their clients. That $10 million dollars could probably keep doors open at Republic Windows and Doors for months.
Final note: when talking about the auto bail-out, conservative columnists go to town talking about union workers’ "extravagant pay and benefits packages." Funnily enough, in today’s front page Journal feature on Thain the word "extravagant" never crops up. Indeed, accroding to the Journal, Mr. Thain’s request "is still relatively small by Wall Street standards."
UPDATE: BY END OF DAY MONDAY, the Journal was reporting that "Merrill CEO Thain, who had been seeking a multimillion-dollar bonus, today requested he not receive one." Score one for shame.