According to a Tuesday night report from the WSJ, Merrill Lynch’s 10 highest-paid employees received a total of $209 million in cash and stock in 2008, up slightly from $201 million they received a year earlier.
Andrea Orcel, the firm’s top investment banker was paid $33.8 million in cash and stock in FY2008.
David Sobotka, now head of global proprietary trading, was paid about $13 million, again in 2008, although the Merrill unit he ran at the time posted negative net revenues of $35.96 billion. Meanwhile, eleven top executives were also paid handsomely as Merrill’s net loss ballooned to $27.6 billion in 2008. They received more than $10 million in cash and stock, while another 149 received $3 million or more.
Information reviewed by the Journal showed that some traders and investment bankers faced only small pay cuts last year, even though the Merrill units they ran posted disastrous losses. This begs the question of how the Board of Directors allowed such compensation based on the firm’s performance!!!
This is not only unacceptable but downright unconscionable. And I am leaving aside here the very delicate aspect of the anguish some of the shareholders of this co. have gone through this last year and unfortunately, continue feeling. These compensations are insulting to people’s intelligence. When employees do poorly at their jobs, they do not get paid millions in stock options and salary. They do actually get their behind fired, which means no pay.
No one should buy the premise that anyone is worth this much, particularly based on the negative performance exhibited by Merrill during last fiscal year. I think as a matter of principal it is only fair all bonus amounts paid to the senior management get clawed back. Otherwise the non-confidence factor in the market will continue persisting.
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