Execs grabbed big bucks just before bailout

Guess who? What a bunch of idiots.

In all, Merrill doled out $3.6 billion in bonuses just days before Bank of America finalized its deal to buy the collapsing firm - with the help of $45 billion in taxpayer money.

Greed doesn't cover it. Arrogance.

Cuomo's investigators have been particularly interested in Merrill's rush to pay the perks in December, a month before the usual January bonus timetable.

This is more than arrogant; it borders on the illegal.

One beneficiary was Peter Kraus, a Thain hire who started at Merrill in mid-September and quit Dec. 18, the day Bank of America took over.

He was at the firm for 3 months?

He walked away with a $24.9 million bonus for those three months of work, which figures to about $249,000 a day. The day he quit, his wife closed on a $36 million luxury Park Ave. co-op, records show.

Yup, three months; it was in his contract.
Cuomo reveals 4 top Merrill Lynch execs grabbed big bucks just before government-financed takeover

by Greg B. Smith - Daily News - Wednesday, February 11th 2009, 4:00 AM

Four of the top executives at Merrill Lynch pocketed $121 million in bonuses just before taxpayers helped finance a takeover of the failing firm, the Daily News has learned.

The flush foursome each pocketed payments ranging from $18 million to $39 million, investigators from the state attorney general's office found.

Attorney General Andrew Cuomo for the past month has been examining the highly suspicious timing of the last-minute Merrill handouts.

In all, Merrill doled out $3.6 billion in bonuses just days before Bank of America finalized its deal to buy the collapsing firm - with the help of $45 billion in taxpayer money.

Cuomo presented his initial findings Tuesday to Rep. Barney Frank (D-Mass.), whose House Financial Services Committee holds hearings Wednesday in Washington on how banks are spending bailout funds.

"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo wrote to Frank.

Cuomo's investigators have been particularly interested in Merrill's rush to pay the perks in December, a month before the usual January bonus timetable.

Cuomo called the decision to accelerate the bonuses "a surprising fit of corporate irresponsibility" that "richly rewarded their failed executives."

Cuomo has subpoenaed former Merrill Chief Executive Officer John Thain and Bank of America's chief administrative officer, Steele Alphin, about the bonuses.

When Cuomo first asked Merrill about its bonus plans back in October, Merrill claimed it hadn't finalized the total size of its bonus pool.

Soon after, it was revealed that Thain was angling for a $40 million bonus. When that embarrassing fact went public, Thain backed off.

Four of his top deputies faced no such change of fortune, however, pocketing a total of $121 million as Merrill evaporated.

One beneficiary was Peter Kraus, a Thain hire who started at Merrill in mid-September and quit Dec. 18, the day Bank of America took over.

He walked away with a $24.9 million bonus for those three months of work, which figures to about $249,000 a day. The day he quit, his wife closed on a $36 million luxury Park Ave. co-op, records show.

Kraus declined to answer questions, although a source familiar with the matter said the amount was guaranteed in his Merrill contract.

Cuomo's investigators want to know why Merrill thought such a guarantee was appropriate given the firm's collapse - and why Merrill didn't try to void it.

The bonuses were handed out just before Merrill announced a record $15 billion loss for the fourth quarter,which brought the year's total losses to nearly $27 billion.

How the firm will try to justify handing out bonuses with such a lousy record remains to be seen.

Bank of America spokesman Scott Silvestri said Merrill Lynch was an independent company when Merrill's compensation committee approved the bonuses.

Silvestri added that many of the Merrill bonuses were contractually guaranteed.

Bank of America's top eight executives took no incentive compensation for 2008. The next tier saw their bonuses cut 80%.

Executive bonuses have become a flash point for resentment as the economy continues to stumble and taxpayers find themselves footing the bill for Wall Street's failures.

Two weeks ago, President Obama called the $18 billion in bonuses Wall Street had just awarded itself "shameful."