Merrill Lynch bailout: Bonuses for bungling
Filed under: Banks, Borrowing, Budgets, Debt, Ripoffs and Scams, Tax, Fraud
Former Merrill Lynch CEO, John Thain, gave out up to $4 billion in bonuses before Bank of America took the company over. Normally, bonuses are paid in January, but they were rushed to beat the Jan. 1 takeover by Bank of America. This came as Bank of America was getting $20 billion more in federal funds in part due to the takeover. Thain, by the way, topped the 2007 list of highest-paid CEOs at $83 million last year.
Now what is wrong with this picture? New York Attorney General, Andrew Cuomo, is asking the same question. He is questioning the fiduciary duty of Thain and other executives.
Fiduciary duty? Who pays attention to that anymore? We have had a culture in financial circles of "every man for themselves" regardless of who gets hurt. Think of Madoff and Kenneth Lay. The people at the top scramble for the bucks while the little guys get busted.
The $4 billion in bonuses were given out quickly. How do you get a bonus for bungling? Very simple, get the taxpayers to give it to you. It is so easy to spend someone else's money when you don't have to be accountable.
I have owned and operated three business and a large hospital system -- I never got a bonus for bungling things. In every business I have been involved with, there were measurable accountabilities and money was paid for performance. If the business was not doing well -- no bonus. If my performance wasn't up to par, I heard about it.
Our culture has become one where overpaid executives, incompetent CEO's, and addictive greed are tolerated. I think it is time to reverse things. If a company is not doing well, like Merrill Lynch, the executives should pay back their salaries. If you bungle, you don't get a bonus. This would bring accountability and stop this crazy financial trainwreck. And the taxpayers could put their money into something that counts, like schools.
Barbara Bartlein is the People Pro. Get a copy of her new book at: Marriage Tips and receive a FREE Couples Workbook for immediate download.
Reader Comments (Page 1 of 1)
1-29-2009 @ 5:27PM
Darrell said...
It's time to get involved - join us at www.uipusa
Reply
1-29-2009 @ 5:27PM
Just me said...
People now have a choice not to do business with BOA or Merril
Reply
1-29-2009 @ 5:30PM
Darrell said...
It's time to get involved - join us at www.uipusa
Reply
2-03-2009 @ 3:05PM
Mike said...
This Man Should be tried and if Guilty put in Jail All is property and holdings belongs to the Tax payers of America. If Obama does not take action against these scoundrals then I do not believe he is the man for the Job. The American people are getting very tired of CEO's of Big Financial Companys taking Retirement Funds and destroying the hopes and dreams of so many hard working honest people. Most Retires have lost 40% of there Holdings no one has bailed them out while an Idot Like this continues to Gloat with no shame.How much of the paid Bonus money went Back to his hidden accounts overseas.
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3-19-2009 @ 1:14AM
Mike N. said...
This is outrageous! $3.6 billion for 200 executives if evenly distributed is $18 million per executive. Why AIG and not Merrill Lynch? Shouldn't these execs have to pay back their bonuses for a company that failed and was taken over by BofA? The moral compass of this leadership team was broken. To me there isn't much of a difference between what Madoff did vs. what these Execs received. The $3.6 billion could have saved a lot of working employees and kept the company solvent for a few years. These Executives raped this company and have set themselves up for life at the expense of the US Taxpayer and investors in Merrill Lynch.
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