Mamas, don't let your babies grow up to be bankers

We just gifted Merrill Lynch executives $3-4 Billion in bonuses in December, directly from TARP.  These guys are shameless, dirty pigs.  They ought to be sent to the gulag, seriously.  They can't stop enriching themselves, even though their uncontrollable, pathological greed caused our current financial crisis. 

Do we need any more proof who should get the lion's share of the blame for this crisis?  "Greedy" homeowners are paying the price, "greedy" unions are paying the price, just about everybody is hurting during this recession and credit freeze -- except the Wall Street SOBs who caused it.

Merrill delivered bonuses before BofA deal

By Greg Farrell and Julie MacIntosh 

January 21, 2009  |  FT.com

 

Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.

 

The timing is notable because the money was paid as Merrill's losses were mounting and Ken Lewis, BofA's chief executive, was seeking additional funds from the government's troubled asset recovery programme to help close the deal.

 

Merrill and BofA shareholders voted to approve the takeover on December 5. Three days later, Merrill's compensation committee approved the bonuses, which were paid on December 29. In past years, Merrill had paid bonuses later – usually late January or early February, according to company officials.

 

Within days of the compensation committee meeting, BofA officials said they became aware that Merrill's fourth-quarter losses would be greater than expected and began talks with the US Treasury on securing additional Tarp money.

 

Last week, BofA said it would be receiving $20bn in Tarp money, in addition to the $25bn that had been earmarked for it and Merrill last year. It was then revealed that Merrill had suffered a $21.5bn operating loss in the fourth quarter.

 

Despite the magnitude of the losses, Merrill had set aside $15bn for 2008 compensation, a sum that was only 6 per cent lower than the total in 2007, when the investment bank's losses were smaller. 

[Wall Street's prime directive: Get while the gettin' is good!  - J]

 

The bulk of $15bn in compensation was paid out as salary and benefits throughout the course of the year. A person familiar with the matter estimated that about $3bn to $4bn was paid out in bonuses in December.

 

Nancy Bush, an analyst with NAB Research, described the size of the 2008 Merrill bonus payments as "ridiculous".

 

BofA said: "Merrill Lynch was an independent company until January 1 2009. John Thain (Merrill's chief executive) decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision."

 

BofA declined to specify when Mr Thain informed the bank of his decision.

 

A source familiar with the matter says Mr Thain, in the weeks leading up to the December 8 compensation committee meeting, had been weighing the possibility of requesting a bonus of at least $10m for himself before ultimately deciding against such a move.

[Wow, what restraint that must have required for him not to reward himself with a $10 million bonus.  A true humanitarian. - J]