Merrill's Thain Wants $10 Million Bonus: Report

It's like setting a house on fire and asking for a reward for calling the fire department...

lmao.

""The compensation committee has not reached a decision, but is leaning toward denying Thain and other senior executives bonuses for this year, the people told the paper.""

LEANING toward denying??? Why is this idiotic request even being considered at all? Only one word needed here: NO.

buster2056
It's like setting a house on fire and asking for a reward for calling the fire department...

As much as I think he does not deserve it - though he may deserve something for preserving shareholder value much better than Dick Fuld for example, don't forget buster that he was brought in well after the damage (or the fire had been set and fueled copiously) had been done by Stanley Neal.

Get your target and facts right - it makes for a better one liners.

He made good by getting the BoA deal (a deal which could have been toward Lehman potentially). He also did not make the mess, he just came in to clean up. Maybe he deserves it but this kind of report makes him a villain. He should know better.

another worthwhile discussion topic; this one having nothing to do with real estate.

The compensation committee feels grateful to Thain for selling ML at $29/share when the others collapsed --- at $10/share or less...

Unbelievable. Why doesn't this guy deserve a bonus? What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he's not worthy? Would you have sold out to BofA or another party at a higher price? Would you have not sold out and played the risk of the market that had just taken down Lehman and convinced GS and MS to become bank holding companies? If you want to ask for Stan O'Neil's compensation back, ok you have an argument, but where did Thain fail given the circumstances? It must be nice to have a job where you don't have any responsility to others or have to face risk.

"It must be nice to have a job where you don't have any responsility to others or have to face risk."

Hey thats the whole banking industry right there! :D

VWear you are clearly new to Streeteasy. Posts here are mainly but surely not exclusively about RE. Even when they are, they twist and take turns and end up in far away places from where they started. It seems that most of the people posting here not only accept this but like it, (see the other responses to this thread) unless it gets stupid and repetitive (see Rufus) or mean and competitive (see Stevejhx and the posters who love to hate him.) If you don´t like a thread, leave it quickly without getting so judgmental, please.

divvie, WssWss - good points, my bad... Realistically, though, $10M for 10 months of work amidst massive layoffs seems a bit egregious and even petty given that he's already a wealthy guy. Deserving or not, he should have the class to forgo it...

If I were on the comp committee, I'd say $900K, that way, he can still live in Manhattan and keep his apt on Park without having to dip into his savings.

Besides, $900K is a respectable wage in a catastrophic economy like this one, and all of the other i-bankers, hedgies, real estate people, and pe people who will be bringing home goose eggs this year, might not feel so bad.

I think it would be an important message to send to people, too...$900K - it's the new $40,000,000!

My only question...will those numbers apply to Manhattan apartments, too?

"What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he's not worthy?"

Because the compensation doesn't come from operations - they have no income, just losses - but rather from capital. And it is my understanding that Merrill took $10 billion in capital from the TARP.

And he's also getting a $5.2 million change-in-control bonus if the deal closes before December 31.

And he got $15 million when he joined Merrill last December.

And he got paid $750,000.

And the share price fell 80% during his tenure.

How's that for a few reasons?

"What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he's not worthy?"

Because the compensation doesn't come from operations - they have no income, just losses - but rather from capital.

uh, ok, so word to the wise, never work for a company that has lost money. In fact, as soon as the company loses money, it should not be able to pay wages as it should immediately be put out of business.

And it is my understanding that Merrill took $10 billion in capital from the TARP.

ok, and was Thain a good steward of the capital or not?

And he's also getting a $5.2 million change-in-control bonus if the deal closes before December 31.
And he got $15 million when he joined Merrill last December.
And he got paid $750,000.

these are all jealousy based arguments

And the share price fell 80% during his tenure.

hmm, a financial stock fell 80% from last November. Must be his fault.

How's that for a few reasons?

those are a few reasons, yes, but go reread what you are responding to and then consider trying again. I specifically asked "What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he's not worthy?"

You can disagree with the amount of Thain's bonus all you want, but it is completely unfair to blame Merrill's situation on him. Thain has done as good a job since he has been there as anyone could have done. Stanley Neal should be smacked around for what he did to Merrill, along with a handful of other individuals who were in his inner-circle.

Again, disagree on the number or any number for that matter, but Thain has done a good job.

"these are all jealousy based arguments"

Absolutely not. I'm no longer a stockholder of Merrill's. I sold at $75.

This is how Oxford defines the word "bonus": a sum of money added to a person's wages for good performance.

Shall we count that good performance?

USB: 52-Wk High: 09/19 $42.23

Today: $29.52.

"Must be his fault."

"What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he's not worthy?"

You must recast the question: if a bonus is defined as " a sum of money added to a person's wages for good performance,"What decisions would you or others have made better in the 10 months between him starting and him agreeing to a deal at BofA that make you believe he IS worthy?"

None. He was hired to fix the firm, claimed he needed no further capital, and then just about got wiped out.

Does he deserve to get paid? Yes. Does he deserve to get a bonus?

No.

If the leader of a company about to fire 25% or more of its workforce cannot assume responsibility for what happened, then who should?

Never fails to amaze me how this steve character is basically nothing more than someone who can open a dictionary or reference material and cite what he reads without the ability for critical analytics.

He says, "This is how Oxford defines the word "bonus": a sum of money added to a person's wages for good performance."

Well, ok, good for you, did you run for student counsel president in HS saying "The Oxford dictionary defines leader as ..."

Just a couple of weeks ago you were arguing that the gift card in the Williamsburg apartment sale needed to be taxed and, in addition to improper citations of IRS laws, you also gave us your link to the definition of "gift."

All of this is in parallel to your career as a translator and even as a former auditor. If it isn't in a book by some authoritative source (it has to be 12x rent to buy because of this link) then it doesn't pass Steve's muster. I realize that online dictionaries have a long way to go, but ultimately steve, you are completely replacable by an advanced computer.

And a couple of things on your recent statements in the above post:
I think the point of saying you are making a jealousy based argument has nothing to do with whether you sold at $75 or not. We all know your track record in investing anyway (worse than lousy) but whether you sold at $75 doesn't make you not-jealous about someone who makes a ton more than you - I'm sure Wsswss agrees.

Also, you made a statement about firing 25%. What does that have to do with anything? Even you acknowledge he represents the shareholders, not the workers. If your argument was based on anything more than anger, you'd see the inconsistency in your position.

For everyone who thinks working on wall st. is just an easy way to make $$$ - why didn't you do it then?? These guys work their butts off. Don't hate.

The discussion should be, did Thain's marginal contribution result in Merrill earning more than what was expected (excess returns or in this case, less losses). However, once Merill took TARP funds, the discussion changes. Now taxpayers should have a right to limit his compensation. Also, where's he going to go if he doesn't get his money..to Lehman, to Bear. The world's changed and while he may not like it, it is what it is.
Thain should consider himself lucky. Look at all the poor men and women that joined the National Guard from 2000-2003. They thought they signed up for some weekend work and maybe loading sandbags along a river bank in case of a flood. Next thing you know, the Iraq war starts and guess who gets sent to walk a beat in Sadr City. These people are risking their lives for government money, all Thain is out is another wing on his house. I know this is largely emotional but sometimes, you just have to do what looks good.

What you said linitin.

Actually I don't know the history but it really is a complete misunderstanding of the stewardship required of Thain in these times and yes, it is a jealousy based argument and a silly one too - I sometimes wonder why anyone would take a job at a troubled company because the public has very short-sighted attitudes.

> For everyone who thinks working on wall st. is just an easy way to make $$$

Was, not is.

lintintin, if someone tells me that a bonus is supposed to be paid on anything but performance, then I need to set the record straight. And that was the argument.

"Just a couple of weeks ago you were arguing that the gift card in the Williamsburg apartment sale needed to be taxed"

I said that it was likely taxable income if a broker's commission wasn't paid on the gift amount, that the IRS would look at a "gift" as a "gift," and that even if they didn't it wouldn't be worth the fight.

"and, in addition to improper citations of IRS laws"

I gave no citations to IRS laws. Those were given by the person arguing that a gift was not a gift.

"you also gave us your link to the definition of 'gift.'"

I don't believe I did.

"I realize that online dictionaries have a long way to go"

It's actually the print version.

"but ultimately steve, you are completely replacable by an advanced computer."

At least it's an advanced one.

"Even you acknowledge he represents the shareholders, not the workers."

I acknowledge no such thing. He's an employee as CEO. As director, he would have a fiduciary responsibility to shareholders - who have been screwed, and then are being asked to pay him $30 million in the span of 12 months.

"If your argument was based on anything more than anger, you'd see the inconsistency in your position."

That is completely illogical. My argument is based on his performance - what he got his shareholders. And what he got them is screwed.

by the way Mets, I don't think the taxpayers have the right to limit his compensation, I think they have a right to have a say alongside the other shareholders. But if government backed companies can't pay real comp, then the government will get what it pays for, subpar executives.

Thain probably should consider himself lucky, that's for sure, but that doesn't change the compensation discussion.

And with respect to National Guard, I'm very saddened by Iraq, very saddened by the losses of lives, the hurt to families, the injuries that will last a lifetime, the economic devastation, the additional distrust of our government by its citizens and those abroad. BUT, if people signed up for National Guard thinking that they were guaranteed to load sandbags and not realizing the full extent of their bargain, then they have to do a bit of introspection as well. If you want to say that the guy at Wal-Mart who was killed the other week in the store didn't sign up for combat - that certainly wasn't a potential outcome in his bargain.

""These guys work their butts off. Don't hate.""

Yeah, but $10 mil?? That'd have to be an awful lot of butt.

"Even you acknowledge he represents the shareholders, not the workers."
I acknowledge no such thing. He's an employee as CEO.

dude, you need to get a grip. We are not communist. A CEO does not represent the workers.

BUT WAIT, you also say,
My argument is based on his performance - what he got his shareholders.

oh, ok, for a second I thought you didn't get it but I'm glad you were able to learn within a couple sentences.

I agree with waverly.

WssWss, my point was that if you take government money, you have to follow government rules. As for taxpayers, a "right" was a bit of hyperbole but we should rank above shareholders. What I was trying to get across is that image matters. Look at what's going on at that factory in Ohio. Hopefully I'm getting this correct but the governor of Illinois and Obama both support the strikers that want B of A to pay for their severance since the bank took TARP funds. Apparently B of A cut off the company's line of credit. I support the bailout but how much money can we print or how much will our taxes have to go up to pay for this.
None of us know whether Thain deserves $10 million and you can disagree with me but Thain has to take one for the team. He's had a good run and done quiet well. I congratulate him on his success but sometimes life isn't fair, even for the most successful people.

mets - I hope that Thain feels that your suggestion is the right thing for him to do, and I would applaud him.

I don't, however, hope that zero bonus is something that is forced upon him.

mets - I hope that Thain feels that your suggestion is the right thing for him to do, and I would applaud him.

I don't, however, hope that zero bonus is something that is forced upon him.

He decided not to take it. Moving on.

Honestly I can see both sides. From what I've read, Thain's previous bonuses have lagged those of his peers who've headed firms that have done worse. And he did avert bankruptcy. It wasn't as if he was outsted after the stock plunged and got a $multi-million payout (like Prince of Citi).

Just really bad timing on his part.

even Cuomo is on this guy:
http://money.cnn.com/2008/12/08/news/economy/Cuomo_Thain/index.htm?eref=rss_topstories

it's not a matter of communist vs capitalist,,, it's just that as a capitalist, they suck! that's why they don't deserve any bonuses. Running the company down to the ground, laying off thousands, you tell me why this guy deserves any bonus

I agree, Thain is getting screwed, relatively speaking.

But, on the flip side, this is a guy who benefitted from being in the industry at its peak. You have to take the bad with the good.

He's made enough money in an industry on its way to the crapper.

nyc10022 works on Wall Street too.

Thain's Ikea comments are getting rave reviews.

It would have been fun to see if Thain said he'd be willing to furnish the $27.5 MM apt. he bought in 2006 with furniture from Ikea . If he would do that, Ikea should definitely hire him as a spokesperson

His hair is fake.

http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/60000/8000/000/68016/68016.strip.gif