We had to take a break from outrage after yesterday's CEO hearings, so we just read Bonus Buster Andrew Cuomo's letter to Congressman Barney Frank about the approximately $3.6 billion Merrill Lynch paid out to executives before its merger with Bank of America. It did not disappoint. As you might expect, Bonus Buster really brought out the fire and brimstone on this one. Is he aghast about the "what can only be described as gigantic" bonuses Merrill Lynch executives "secretly and prematurely" awarded themselves ahead of their "awful" fourth-quarter earnings? Yes he is! Has he been taken aback by their "surprising fit of corporate irresponsibility"? So aback! Does he find this disturbing? Multiple times! And he is not exaggerating.
What my Office has learned thus far concerning the allocation of the nearly $4 billion in Merrill Lynch bonuses is nothing short of staggering. Some analysts have wrongly claimed that individual bonuses were actually quite modest and thus legitimate because dividing the $3.6 billion over thousands upon thousands of employees results in relatively small amounts — estimated at approximately $91,000 per employee. In fact, Merrill chose to do the opposite. While more than 39 thousand Merrill employees received bonuses from the pool, the vast majority of these funds were disproportionately distributed to a small number of individuals. Indeed, Merrill chose to make millionaires out of a select group of 700 employees.
That really is staggering. We literally fall over every time we think about it.
Attorney General Cuomo's letter to Congressman Barney Frank regarding Merrill Lynch's 2008 bonuses [Office of the Attorney General]