Update 4:40pm EST: Morgan Stanley's CEO John Mack has announced that he will not be getting a bonus for the second year in a row:
Morgan Stanley CEO John J. Mack is giving up a bonus for the second straight year amid a climate of bank failures, thousands of layoffs and an economic recession.
Mack said in a memo Monday to employees obtained by The Associated Press that he and the firm's two presidents, James Gorman and Walid Chammah, informed their board's compensation committee of their decision to forgo 2008 bonuses, and the committee accepted.
Update 3 pm
Senate Majority Leader Harry Reid has released a statement regarding Thain's "chutzpah" in asking for the money.
via The Hill
"The TARP program, from which Merrill Lynch has taken billions of taxpayer dollars, was designed explicitly to limit executive compensation, bonuses and golden parachutes. While American families struggle to keep their jobs and their homes, I question the chutzpah of asking for a $10 million taxpayer-subsidized bonus. Americans deciding which bills to pay this month just to make ends meet do not want their hard-earned money even indirectly spent rewarding executives from banks that are largely responsible for the economic crisis. I sincerely hope that Merrill Lynch rejects this request."
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From the Wall Street Journal:
Merrill Lynch & Co. chief John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered securities firm's compensation committee is resisting his request, according to people familiar with the situation.
The committee and full board are scheduled to meet Monday to hear Mr. Thain's formal bonus recommendations for himself and other senior executives of the New York company. No decision has been reached, and it isn't known what Mr. Thain will recommend, but the compensation committee is leaning toward denying the executives bonuses for this year, these people said.
Reuters points out that several other Wall Street firms, including Goldman Sachs, will not be giving out bonuses to top executives this year. Though Thain's company was sold to Bank of America after losing a net $11.67 billion this year, Thain argued that it could have been worse.
From the Reuters story:
Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, people familiar with his thinking told the WSJ.Members of Merrill's compensation committee agree with Thain that the takeover is in shareholders' best interest, but believe it would be foolish to ignore strong public sentiment against large compensation packages, the paper said, citing people familiar with their thinking.
Thain will stay with the company following the merger, Bank of America has said. Thain, for his part, has predicted that "thousands" of other Merrill jobs will be lost in the wake of the merger.