In case you had any doubts about the propriety of Merrill’s 2008 pay packages, this Wall Street Journal story on the continuing slugfest between Merrill’s former CEO John Thain and Bank of America’s chief Ken Lewis should put any doubts to rest: According to a securities filing last week, Merrill’s overall compensation and benefit expenses […]
Read more...Some readers have suggested that while ex-Merrill CEO John Thain’s actions post the agreement to buy his firm were questionable, his ouster was an effort to divert blame and attention for the turkey deal from BofA CEO Ken Lewis. If Thain, as Lewis charged, ducked direct questions about Merrill’s deteriorating financial condition, or worse, was […]
Read more...We posted this in June: The Wall Street Journal reports today that Citigroup is shutting down Old Lane Partners, a hedge fund started by Vikram Pandit that the bank acquired a mere 11 months ago. The bank decided it couldn’t spare the capital to shore up the struggling hedge fund. The article noted: Old Lane […]
Read more...Literature is rife with quotes and vignettes illustrating the gulf between the rich and everyone else. And those quips generally take class differences as a given. Far more interesting and corrosive are the anecdotes that seek to get the public to accept status differences when the basis for them is shaky indeed. One of my […]
Read more...Over a weekend, word leaked out that AIG is paying yet more retention bonuses. This move is making a complete and utter sham of the supposed punitive elements of the rescue. But clearly, there was not enough of an adverse reaction to the earlier announcements of retention bonuses to deter the giant insurer. A few […]
Read more...How can you give cash compensation to an executive, yet claim it is not a salary or bonus? You call it a “retention bonus,” No, I am not making this up. Note that AIG chose to make this disclosure the day before Thanksgiving, clearly choosing a time when it would attract the least notice. Not […]
Read more...The New York Times, writing from the industry town, in “Wall Street’s Pay Is Expected to Plummet,” tries to make the case that the calls for scalps deeper pay cuts are overdone: The first clues are emerging that Wall Street pay will plummet this year — but perhaps not enough to satisfy the financial industry’s […]
Read more...Hauling executives from the private sector before Congress and lambasting them about pay has had zero impact on top level compensation. However, now that the banking industry is a ward of the state and the Democrats might not just win the Presidency but also could get a filibuster-proof majority in the Senate, the banking industry […]
Read more...Banks have proven to be remarkably immune to condemnation over senior level pay. CEOs and top level producers seem to have an undimmed sense of entitlement, even though the nine banks receiving the first Treasury handouts equity purchases earned a collective $305 billion from 2004 to mid 2007, followed by $323 billion in writedowns. But […]
Read more...The Financial Times reports tonight that if Merrill wants Larry Fink, the head of Black Rock, to become CEO, the price is probably $400 million. That’s the estimated cost of buying out Fink’s stake in the company, an necessary step, since would otherwise have an incentive to make decisions that favor Black Rock (Merrill now […]
Read more...The New York Times got a hold of a hum-dinger: that Merrill Lynch’s CEO Stanley O’Neal had called G. Kennedy Thompson, the CEO of America’s fourth largest bank, Wachovia, last week to feel out a possible merger. Thompson’s reaction was cool, and his stated reason was that the Charlotte, NC bank was still digesting earlier […]
Read more...Apologies for having two Financial Times items in succession, but the FT all too frequently has the goods. In a new item that so far had not been picked up by the Wall Street Journal, the Financial Times reports that a survey by the National Association of Directors found that two thirds of CEOs said […]
Read more...The Financial Times reports today that institutional investors and the SEC are taking interest in the difficult-to-justify pay disparities between the CEO and his immediate subordinates at some public companies. And isolated data points, like Sallie Mae, suggest that the ones with the biggest gulf (in its case, ten times) aren’t delivering commensurate performance. A […]
Read more...This Penn State study, reported at PhysOrg.com, ascertained that narcissistic CEOs gravitate towards bold moves, like big acquisitions or marked changes in strategy, which leads to more variable (although no worse on average) performance. The interesting thing about this finding is the disconnect between Wall Street pressures and boardroom hiring practices. At least according to […]
Read more...In Saturday’s New York Times, Gretchen Morgenson reported that House Committee on Oversight and Reform had issued a subpoena to Towers Perrin, an executive compensation consulting firm, because it had failed to comply with an information request regarding potential conflicts of interest in its pay consulting business. Now because this was a news story, rather […]
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