Option Armageddon 13 Febbraio 2009

John Thain bonused his guys a bit early this year, rushing out the payments prior to closing the merger with BofA.  NY Attorney General Andrew Cuomo is on the case and found some startling facts.  In this letter to Barney Frank he outlines his most damaging findings.  Most interesting is that while the $3.6 billion bonus pool was split among 39,000 employees, 149 of them (a third of 1%) took home 24% of the pool.  Here’s Cuomo’s breakdown:

    * Top 4 bonus recipients got $121 million
    * Recipients 5 thru 8 got $62 million
    * 9-14 got $66 million

    * 14 guys got over $10 million
    * 20 received over $8 million
    * 53 received over $5 million
    * 149 over $3 million
    * 696 over $1 million

The second part of Cuomo’s list is a little redundant.  The 14 guys that received over $10 million are included in the group that received over $8 million.  Which means 6 guys got between $8 and $10 I guess.  And so on down the line.

Now, Wall Street bonuses have always been large and top heavy.  Rainmakers and other top performers get paid very well so they don’t jump ship to another bank or hedge fund.

What’s so galling is that the money paid wasn’t Merrill’s to give.  The bank survives today courtesy of taxpayers’ bailouts and guarantees.  In their absence, Merrill (and BofA) would be goners at this point and whatever cash they had on hand would be going to creditors to pay off bad debts.

Source >  Option Armageddon | Feb 12