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On December 8, The Wall Street Journal reported that John Thain, the 53-year-old chairman and C.E.O. of Merrill Lynch, had let it be known he wanted a $10 million bonus.
In-Thain Demand: Ex–Merrill Lynch C.E.O. John Thain ($15 million signing bonus in 2007) and predecessor E. Stanley O’Neal (compensation: $87 million in five years).
And why not? After all, Thain had made the brutally pragmatic decision, over the mid-September weekend that changed Wall Street forever, to sell the 94-year-old firm to Bank of America for $50 billion, averting the bankruptcy that awaited Lehman Brothers that Monday and saving Merrill’s shareholders billions of dollars. Surely, even in a bad year, he was entitled to the equivalent of a 25-cent tip on the deal.
But the directors balked. Wouldn’t that send the wrong signal after Merrill’s net losses for three quarters of $11.67 billion? Especially after Bank of America had taken $15 billion of federal bailout money and was due to take the $10 billion earmarked for Merrill as well? When as many as 30,000 jobs may be lost from the acquisition?
The same day came a scathing letter to the board from New York attorney general Andrew Cuomo. Soon after, a grim Thain walked into Merrill’s boardroom and apparently told the directors he’d had a change of mind: no bonus for him, thank you.
Thain had gotten the message at last: bonus season would be different this year. At least, it would have to look different…
