In what will likely be tomorrow's #1 scandal on CNBC, FT reports that Merrill had decided to pay bonuses in December ahead of their usual payout time in February, and just three days before the merger with Bank of America closed. What is more troubling is that the shell of a company had allocated a total comp pool for distribution that was $15 billion or just 6% lower than 2007. BofA apparently had no problem with this accelerated payout. However, within days of the go ahead decision "BofA officials said they became aware that Merrill's fourth quarter losses would be greater than expected and began talks with the treasury on securing additional TARP money."And sure enough days later Joe Lewis bought $1.2 million of BAC stock, frontrunning the US taxpayers who funded bailout number 2: this time the TARP check was for $20 billion, or roughly enough to cover the comp paid out weeks earlier at Merrill.
Good to know that all the Merrill employees were so critical that the flight risk was worth $15 billion, or enough to almost bring the successor company down. Any headhunters know what Angelo Mozzillo is saying his comp for 2008 was as he is looking for a job? It is surprising to us that with all these news of gargantuan corporate impropriety at BAC, nobody has started rioting or looting the glassy eco-friendly skyscraper at One Bryant Park.
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2 comments:
I worked on Wall Street for nearly thirty years. When people ask me what I did for a living, I'm now embarrassed to tell them. Perhaps I should tell them I was a lawyer. Less of a scowl. Sorry state of affairs.
You weren't embarrassed before, that is before they would have really understood what you did?
Heh, I worked there too until recently at a major (former) investment bank. It's not much different from what other people do, the work is not harder, but that the pay is higher.
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