Money Management
Merrill Lynch Was considering giving John Thain, its CEO, a $10 million BONUS, thats in addition to his salary of $83 million. Merrill Lynch explained it by saying that he made the stockholders including himself money by selling Bank of America. To me selling assets doesn’t really deserve praise. Anybody could sell something they own and make a profit. Should I sell my house, to pay off debt, and then claim a huge bonus, because the selling of the house made money?
The fact of the matter is, Merrill Lynch lost $11 billion this year. That does not seem like something to celebrate about. How many employees are getting ZERO bonus this year and are told it is due to the $11 billion loss? That $10 million could give 1/3rd of its workforce $500 Christmas bonuses, and really who is more in need and deserving of a bonus in these tough economic times?
But those people should consider themselves lucky. Merrill Lynch cut 4,000 jobs this year. 4,000 people out of work, due to “poor performance” but apparently the performance is good enough for a $10 million bonus. The money for the bonus is coming from those employees no-longer-existent salaries. in fact with that bonus, they could give 200 people jobs at $50,000 a year. Now how in all actuality is that money better spent? The bonus of 1 person, or a workforce increased by 200? I would bet that 200 people working for Merrill Lynch are more productive for the company than the 1 CEO.
I bet he could survive off of $10 million a year, how much do you want to bet? Cut his salary by $70 million, employ 1400 new employees, they could turn the company around. He would be left with $13 million per year but I think he can deal.
Luckily, Thain sensed the national tension, and decided to forgo the bonus this year. But that doesn’t stop other companies from doing it. Merrill Lynch isn’t the only one, many companies do it. I just wish that the executives didn’t have such a conflict of interest at the top to pad their salaries. Let’s let those companies vote, and I mean ALL employees vote (in a secret ballot) on the salaries of the top executives. See how much cash flow the company has then to work with.
(3 votes, average: 5.00 out of 5)
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