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Outrageous

By Anonymous

I suspect there's more to the story, but suffice it to say that if true, then this is an outrageous stunt:

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.
...
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.
...
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.

It's clear now that Ken Lewis bought a lemon. And by Ken Lewis, I mean U.S. taxpayers.

Full post as published by Economics of Contempt on January 22, 2009 (boomark / email).