Merrill Lynch’s former brokerage chief Robert McCann told a New York trial court that John Thain, the firm’s former chief executive, gave him no choice but to voluntarily forgo his bonus in 2008.
From the Wall Street Journal:
At a hearing Wednesday in New York State Supreme Court, Mr. McCann testified that Mr. Thain in December told a group of high-level Merrill Lynch executives, including Mr. McCann, that they had a “wonderful opportunity” to give up their bonuses.
Mr. McCann said this came after Mr. Thain had spent most the day meeting with Merrill Lynch’s board, following a Wall Street Journal story that said Mr. Thain had lobbied the board for a 2008 bonus of as much as $10 million — a move that put a spotlight on the bonus process at Merrill.
“I guess I volunteer, John,” Mr. McCann said he responded. “Can I go back to work now?”
McCann was testifying in a case that revolves around a dispute between him and Bank of America. The bank, which acquired Merrill Lynch earlier this year, says McCann agreed not to work for a rival until 2010. McCann says the agreement was nullified when he was effectively fired.
We’re told by people familiar with the matter that McCann has plans to run the brokerage unit of UBS, which me may rename Paine Webber. UBS acquired Paine Webber earlier this decade.
The bonus dispute is sure to become part of the larger fight over the last days of Merrill Lynch. Both Andrew Cuomo and a federal court are pressuring Bank of America on bonuses paid despite the fact that the firm was losing billions. Peter Kraus, a former colleague of Thain’s at Goldman Sachs, got a $25 million bonus for just three months work at the firm.