Andrew Cuomo, attorney general of the state of New York, has quite a way with words.
Witness his latest missive, addressed to the Merrill’s board of directors, “Re: Bonus Pools”.
Highlights, emphasis ours:
As you know, this Office is conducting an ongoing inquiry into various aspects of executive compensation at Wall Street firms, including Merrill Lynch & Co., Inc. On October 29, 2008, we asked you to detail, among other things, your plans for executive bonuses this year, including the criteria you plan to use in determining what, if any, bonuses are appropriate for your top executives.
On November 5, 2008, the Board responded and stated that any bonuses would be based upon a combination of performance and retention needs. In light of these factors, current reports that the Board is considering giving Merrill’s Chief Executive Officer a $10 million bonus are nothing less than shocking.
Utilizing Merrill’s own criteria, a bonus of this size appears unjustified. In terms of performance, Merrill has reported losses for every quarter this year and has lost more than $11 billion for the year as a whole. Indeed, Merrill’s decision to be taken over by Bank of America seems to have been the only thing that saved Merrill from collapse. Clearly, the performance of Merrill’s top executives throughout Merrill’s abysmal year in no way justifies significant bonuses for its top executives, including the CEO.
Ouch.
Related links:
Thain’s Bonus – Felix Salmon/Market Movers
“Thain is probably among the executives that actually deserve a bonus this year” – Clusterstock
Thain Spars With Board Over Bonus at Merrill – WSJ