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As Elvis sang in a mournful song, it’s going to be “a blue, blue, blue Christmas” for some of the superstud CEOs of Wall Street this year. That’s because they’ll be without their true love: Bonus money.
Having made a mess of their own companies, while also crashing our overall economy, many of these high-rolling bankers are down in the dumps this holiday season, for they are being denied the multimillion-dollar bonuses they’re usually handed at year’s end. It seems that compensation committees at Wall Street firms are skittish about what the corporate world calls “optics.” You and I would call it, “something that looks bad.”
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Yeah, counting your bonus money while sitting on sacks of taxpayer bailout funds – that’s definitely a bad optic.
Bad morals, too, but, hey, that doesn’t keep a CEO from making a grab for it. John Thain, for example, is honcho of Merrill Lynch. Even though his investment bank bled $11-billion in losses this year and had to be rescued in a taxpayer-subsidized takeover by Bank of America, Thain had the clueless arrogance to demand a $10 million bonus from his board. Gosh, what would he have asked for if his company hadn’t collapsed?
When the media, the Congress, and everyone this side of Wall Street exploded into outrage, Thian’s board reviewed the optics of doling out the bonus and decided, “hmmmm… no.”
So poor John won’t be cuddling up in front of his fireplace with a $10-million bonus bag this Christmas, but I doubt he’ll be all that blue. After all, he still has his $750,000 salary for the year, a $15 million signing bonus he got last December, a longterm pay deal worth up to $120 million, and such other executive toys as personal use of the corporate jet.
Even in hard times, it can be very merry at the top.
“Bonus Season Afoot, Wall Street Tries for a Little Restraint,” The New York Times, December 9, 2008.
“Merrill chief Thain withdraws request to bonus,” www.yahoo.com, December 9, 2008.
“Merrill CEO drops $10M bonus bid,” www.cnn.com, December 9, 2008.
“Morgan Stanley, Merrill chief gives up bonuses,” www.usatoday.com, December 9, 2008.
“The Vanishing CEO Bonus,” www.forbes.com, December 9, 2008.
“Disgusting: Bought Out Merrill CEO Wants $10 Million Bonus,” www.alternet.org, December 8, 2008.