Having almost completed the sale to Bank of America, Merrill Lynch (MER) CEO John THain is touching Wall Street’s third rail: his bonus. The Wall Street Journal says Thain is seeking a $10 million bonus — one which directors in this environment are understandably reluctant to improve:
The committee and full board are scheduled to meet Monday to hear Mr. Thain’s formal bonus recommendations for himself and other senior executives of the New York company. No decision has been reached, and it isn’t known what Mr. Thain will recommend, but the compensation committee is leaning toward denying the executives bonuses for this year, these people said.
If Merrill denies Thain a bonus for this year, that will be totally understandable. But Thain is probably among the executives that actually deserve a bonus this year. He could’ve huffed and puffed about how Wall Street didn’t understand his business and that there was no reason to do a deal since the market irrationality would soon pass. By not putting up that fight, he probably saved the shareholders a lot of money. But with senior execs at Goldman (GS) and elsewhere forgoing bonuses, actual merit might be out the window.