Cuomo
ALBANY, N.Y. (Legal Newsline) - New York Attorney General Andrew Cuomo is upset with reports that say Merrill Lynch is considering giving $10 million in bonuses to top executives.
Cuomo continued on Monday to press Wall Street firms that are benefiting from the federal bailout, urging Merrill Lynch not to spend taxpayers' money on executive bonuses. Cuomo said in a letter to the company that reports that the company's Board is mulling $10 million for CEO John Thain are "nothing less than shocking."
Bank of America is taking over Merrill Lynch, and Thain is to head the company global banking, securities and wealth management business. Bank of America has received $25 billion in taxpayer funds, Cuomo said.
"Utilizing Merrill's own criteria, a bonus of this size appears unjustified," Cuomo said. "In terms of performance, Merrill has reported losses for every quarter this year and has lost more than $11 billion for the year as a whole.
"Indeed, Merrill's decision to be taken over by Bank of America seems to have been the only thing that saved Merrill from collapse. Clearly, the performance of Merrill's top executives throughout Merrill's abysmal year in no way justifies significant bonuses for its top executives, including the CEO."
Cuomo had written the company on Oct. 29. He has also pressured companies like American International Group, which recently announced it will limit its executive pay package and freeze the salaries of and eliminate bonuses for seven top executives.
Cuomo asked Merrill Lynch to alert him as soon as possible as to the company's executive bonus plan.
Cuomo also applauded the decision by Morgan Stanley CEO John Mack to forgo a bonus.
"Morgan Stanley and Mr. Mack have taken a smart and prudent first step," Cuomo said. "American taxpayers have seen their investments crater while simultaneously having to fund the Wall Street bailout with billions of their tax dollars.
"This gesture by Morgan Stanley is appropriate, and I hope other firms like Merrill Lynch will take it to heart."
From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.