Merrill Lynch chief executive forced out over bonus row
New York - The hangover of Bank of America's (BoA) shotgun wedding to Merrill Lynch organised in September 2008 continues. John Thain, the chief executive officer of Merrill Lynch until its formal takeover by BoA on January 1, was sacked as a result of bad publicity surrounding a decision to pay Merrill executives $4 billion in employee bonuses one month early, at the end of December.
Thain, who maintains BoA was fully aware of the decision and involved in discussions, also received additional negative publicity thanks to the leaking of the $1 million cost of the refurbishment of his Merrill Lynch office. According to press reports, BoA says it was informed of the decision to give bonuses early, but was not party to it.
The bonus news came on the heels of BoA's announcement of a $15.3 billion loss related to its acquisition of Merrill Lynch. Although BoA had announced profits of $4.01 billion for 2008, the Merrill Lynch loss had already forced it to apply for debt protection from the US Treasury.
BoA's 2008 results include its purchase of Countrywide Financial on July 1 2008, but not the Merrill deal, which took place officially on January 1, 2009.
The Treasury and Federal Deposit Insurance Corporation (FDIC) has offered to guarantee $118 billion of debt held by Bank of America in loans, securities backed by residential and commercial real estate loans and other assets, marked to current market value. The Treasury is also investing a further $20 billion directly through its Troubled Asset Relief Program in exchange for preferred stock, offered with an 8% dividend.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Fed green lights more capital relief trades
Five US banks authorised to issue repeat credit-linked notes backed by financial guarantees
Basel III endgame: why moving fast might prove better for banks
Republicans are pushing for reproposal, but a rapid finalisation may prove less far-reaching
Isda pushes to ‘decouple’ Simm calibration from model changes
Emir 3.0 prompts effort to separate risk-weight revisions from methodology updates
Basel war on window-dressing may smooth liquidity, at a price
Changes to G-Sib charge could curb year-end repo volatility, but also cut balance sheet capacity
One year on, regulators still want a cure for bank runs
Broad support for higher outflow assumptions on uninsured deposits, but that won’t save insolvent banks
Watchlist and adverse media monitoring solutions 2024: market update and vendor landscape
This Chartis report updates Watchlist monitoring solutions 2022 and focuses on solutions for sanctions (name and transaction) screening and monitoring adverse media and its related elements
Basel Committee reviewing design of liquidity ratios
Focus on LCR and NSFR after Silicon Valley Bank and Credit Suisse, but assumptions may not change
Risk, portfolio margin, regulation: regtech to the rescue
A white paper outlining the complexity of setting the course for risk, margin and regulation
Most read
- Breaking out of the cells: banks’ long goodbye to spreadsheets
- Too soon to say good riddance to banks’ public enemy number one
- Industry calls for major rethink of Basel III rules