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Merrill Lynch paid executives US$ 3.6 billion in bonusesbefore it reported US$ 15 billion in losses for the 4th quarter of2008. The bonus payments are being investigated by the New York Attorney General. John Thain, the Chairman and CEO of the former Merrill Lynch, had brought the payments forward as usually they would not have been paid until early in 2009. When taking over from Stan O'Neal, Thain told analysts and investors that he was going to make significant changes including a more focused allocation of risk and an incentive plan firmly based on overall company performance and a greater proportion of incentives to be paid to employees in the form of stock. It is very difficult to understand how paying out US$ 3.6billion in bonuses in a year where total losses were US$ 30 billion equates to an incentive plan firmly based on overall company performance. Nor does it show any alignment with shareholders, who have seen the value of their stock fall over 50% in 12 months or over 70% since the end of 2006. The top four bonus recipients received a combined $121 million; The next four bonus recipients received a combined $62 million; The next six bonus recipients received a combined $66 million; Fourteen individuals received bonuses of $1 0 million or moreand combined they received more than $250 million; 20 individuals received bonuses of $8 million or more; 53 individuals received bonuses of $5 million or more; 149 individuals received bonuses of $3 million or more; Overall, the top 149 bonus recipients received a combined $858 million; 696 individuals received bonuses of $1 million or more.
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