[Corp. Watch] Corporate looting: Merrill Lynch expedited bonuses before firesale to B of A

[Corporation Watch]

Thain Resigns From Bank of America

  By Stephen Bernard

(Associated Press, Jan. 22) -- Former Merrill Lynch CEO John Thain  
resigned from Bank of America (B of A) on Thursday, following news  
that Merrill had moved up its year-end bonuses, paying them just  
before B of A completed its acquisition of Merrill and sought more  
government bail-out money.
	The company gave no reason for Thain's departure. Bank of America  
spokesman Scott Silvestri issued a terse statement: "(B of A Chairman  
and CEO) Ken Lewis flew to New York today to talk to John Thain. And  
it was mutually agreed that his situation was not working out and he  
would resign."

	The bonuses to Merrill Lynch executives were also paid out as the  
company prepared to report a $15.45 billion fourth-quarter loss -- a  
loss that led Bank of America to request and receive $20 billion in  
government bail-out money. Merrill also received bail-out funds.

	Bank of America has increasingly come under criticism in recent weeks  
for its acquisition of Merrill Lynch, a deal fostered by the  
government to save Merrill Lynch on the same day that Lehman Brothers  
collapsed amid the ballooning credit crisis.

	On Thursday, Bank of America said it knew of Merrill's plans to move  
up the bonuses. "Merrill was an independent company until Jan. 1 of  
2009," Silvestri said. "John Thain decided to pay year-end incentives  
in December, as opposed to their normal date in January. Bank of  
America was informed of his decision."

	Bonuses were not paid, though, to Thain and four other top executives  
-- President and Chief Operating Office Greg Fleming, Chief Financial  
Officer Nelson Chai, President of Global Wealth Management Robert  
McCann, and General Counsel Rosemary Berkery -- who requested they not  
receive additional compensation.

	The bonuses raise the question of how proper it was for executives in  
a struggling company to be given big pay-outs even as its soon-to-be- 
parent was accepting billions of dollars in government money.

	Bonuses are widely seen in the investment banking industry as  
necessary to retain top performers, but the fact that they were  
granted while tens of thousands of jobs were being eliminated across  
the securities and banking industry raises another question: How  
necessary were they to prevent defections?