Head Shaker graduates to Gut Wrenching
TPMMuckraker | Talking Points Memo | Merrill Paid Billions In Bonuses, As New Owner Sought More Bailout Dollars:
"Just to get a clear sense of how this all went down, and what a boondoggle this looks to have been for Merrill, it's worth looking at a timeline of events:
- 9/14/08: Bank of America buys Merrill. Over the previous four quarters, Merrill had posted losses of more than $17 billion.
- 10/14/08: Bank of America gets $25 billion in bailout funds, largely in order to help it take on Merrill's losses.
- Fall 08: A proposal is made to Merrill's compensation committee that Thain receive a $10 million bonus.
- 12/05/08 - Merrill and Bank of America shareholders vote to approve the takeover.
- 12/08/08 - Merrill's compensation committee declines to approve the proposal on Thain's bonus, but nonetheless approves payouts to staff totaling $3-4 billion.
- Days later: Bank of America learns that Merrill's fourth-quarter losses were greater than expected. B of A begins lobbying the federal government for more TARP money to ease the takeover.
- 12/29/08 - Merrill pays bonuses paid, at least a month ahead of the usual schedule.
- 1/16/09 Treasury says it will give Bank of America another $20 billion in TARP money, to help it absorb the larger-than-expected Merrill losses.
- 1/16/09: Merrill reports a $15.3 billion fourth quarter loss.
The payouts are made even more shocking by the fact that, as a TPM reader pointed out this afternoon, in the current climate, staffers hardly require massive incentives to stay on -- which is usually the justification given for lavish bonuses. After all, it's not as if they're fighting off job offers from other thriving competitors."
"Just to get a clear sense of how this all went down, and what a boondoggle this looks to have been for Merrill, it's worth looking at a timeline of events:
- 9/14/08: Bank of America buys Merrill. Over the previous four quarters, Merrill had posted losses of more than $17 billion.
- 10/14/08: Bank of America gets $25 billion in bailout funds, largely in order to help it take on Merrill's losses.
- Fall 08: A proposal is made to Merrill's compensation committee that Thain receive a $10 million bonus.
- 12/05/08 - Merrill and Bank of America shareholders vote to approve the takeover.
- 12/08/08 - Merrill's compensation committee declines to approve the proposal on Thain's bonus, but nonetheless approves payouts to staff totaling $3-4 billion.
- Days later: Bank of America learns that Merrill's fourth-quarter losses were greater than expected. B of A begins lobbying the federal government for more TARP money to ease the takeover.
- 12/29/08 - Merrill pays bonuses paid, at least a month ahead of the usual schedule.
- 1/16/09 Treasury says it will give Bank of America another $20 billion in TARP money, to help it absorb the larger-than-expected Merrill losses.
- 1/16/09: Merrill reports a $15.3 billion fourth quarter loss.
The payouts are made even more shocking by the fact that, as a TPM reader pointed out this afternoon, in the current climate, staffers hardly require massive incentives to stay on -- which is usually the justification given for lavish bonuses. After all, it's not as if they're fighting off job offers from other thriving competitors."
Comments