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Cuomo: Merrill CEO bonus is 'shocking'
New York Attorney General lashes out at potential $10 million bonus for the battered investment firm's chief executive.
By Ben Rooney, CNNMoney.com staff writer
Last Updated: December 8, 2008: 2:01 PM ET
NEW YORK (CNNMoney.com) -- New York Attorney General Andrew Cuomo said Monday that the $10 million bonus reportedly being considered for Merrill Lynch's chief executive John Thain is "nothing less than shocking."

In a strongly worded letter sent to members of Merrill's board of directors, Cuomo points out that the brokerage reported losses for every quarter this year, and has lost more than $11 billion in 2008.

He added that Bank of America's (BAC, Fortune 500) takeover of Merrill, which was formally approved by shareholders Friday, "seems to have been the only thing that saved Merrill from collapse."

"Clearly, the performance of Merrill's top executives throughout Merrill's abysmal year in no way justifies significant bonuses for its top executives, including the CEO," Cuomo said in the letter.

A spokeswoman for Merrill Lynch (MER, Fortune 500) declined to comment.

Merrill Lynch's Thain, 53, who joined the ailing brokerage last December, is reportedly requesting a year-end bonus of $10 million, a source familiar with Cuomo's investigation told CNN.

Massive losses
Thain replaced Stanley O'Neal as chief executive after the firm reported its first multi-billion dollar loss on bad mortgage-backed assets late last year.

As losses accelerated at Merrill, Thain orchestrated the deal with Bank of America in September in a bid to save 94-year-old brokerage.

The deal valued Merrill at $50 billion at the time. Bank of America shares have fallen 46% since then, putting the value on the merger at just under $20 billion as of Friday.

Cuomo has been a vocal critic of the "outsized" bonuses Wall Street's top executives have received, which he says are even more unjustified in light of the current economic crisis and the billions of taxpayer dollars that have been injected into the banking system.

In October, Bank of America received a capital investment of $15 billion from the government's Troubled Asset Relief Fund. To date, the government has given a total of $161 billion to more than 50 banks.

"It is imperative that Merrill's Board prevent wasteful expenditures of corporate funds on outsized executive bonuses and other unjustified compensation," Cuomo said.  

First Published: December 8, 2008: 12:42 PM ET
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