Do these guys have no shame? It turns out that Merrill Lynch paid out $3-4 bn in bonuses just three days before the closure of its sale to Bank of America. This happened just as BofA sought an additional $20 bn from the US government to help it close the deal.
Merrill's boss, John Thain, was about to seek $10 mn in bonus for himself but changed his mind. No doubt, this was for Merrill's operating loss of $21.5 bn in the fourth quarter. He had also spent lavishly on renovating his office- a fact to which President Obama referred in a speech yesterday. Thain won't be around to enjoy his sparkling office- BofA chairman Ken Lewis has given him the boot.
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BofA is aware of all those bonus payments. They approved it, of course! The whole charade was to blame it on John Thain. J.T. did what he thought would be the best for employees, shareholders. It is Ken Lewis problem now!
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