Forget, for a moment, all that scary stuff about Merrill Lynch’s synthetic paper crunch, and Stan O’Neil and his team “working to resolve the remaining impact from our positions.” Here’s the really scary stat in the bank’s Q3 figures, released on Wednesday:
Compensation and benefits expenses were $2.0 billion for the third quarter of 2007, compared with $3.9 billion in the third quarter of 2006.
But before the Thundering Herd simultaneously phone home and issue their other half with a profits warning, an “additional item” to the Merrill announcement adds:
Merrill Lynch remains focused on paying its best performing employees competitively. In the same vein, it may be necessary to accrue compensation expense at a higher level in the fourth quarter to ensure it can appropriately reward employees whose performance will drive future growth.
In the meantime, for the full horror show ($7.9bn writedown, continuing exposure of $20.9bn of ABS, CDOs and subprime, etc, etc) go here.
