No Bonuses For Wall Street Executives

Morgan Stanley, Goldman Sachs And Merrill Lynch CEOs To Forgo Cash Or Stock Extras This Year

(CBS/AP)  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.

He also said the company is planning to make further changes to year-end compensation for other employees.

Mack did not receive a bonus for 2007, either.

The executives, however, are still being paid. Last year, Mack earned a salary of $800,000 as well as nearly $400,000 in other compensation, including personal use of a corporate jet.

Compensation for the 14 members of the firm's operating committee will be down an average of 75 percent, and down 65 percent for the 35 members of the management committee.

Morgan Stanley plans to tie compensation for all employees eligible for bonuses more closely to performance. It will also allow for "clawbacks" — where the company could reclaim any bonus paid to an employee if his or her actions led to "the need for a restatement of results, a significant financial loss or other reputational harm," the memo said.

Meanwhile, Merrill Lynch & Co. said its CEO John Thain also asked to go without the extra compensation for 2008 after reports surfaced he had sought as much as $10 million.

Merrill Lynch said Thain and four other top executives - President and COO Greg Fleming, Chief Financial Officer Nelson Chai, President of Global Wealth Management Robert McCann, and General Counsel Rosemary Berkery - have all requested that they do not receive bonuses for 2008. According to a statement by the bank, the executives cited "current economic and market conditions" for their request. Directors at the regularly scheduled board meeting Monday accepted the offer.

The Wall Street Journal reported that Thain previously sought a multimillion dollar bonus, which raised the ire of some regulators.

New York State Attorney General Andrew Cuomo, who is conducting an ongoing inquiry into executive compensation at Wall Street firms, has been asking firms to scrap their bonuses this year.

"Morgan Stanley and Mr. Mack have taken a smart and prudent first step," Cuomo said in a statement made before the Merrill Lynch announcement. "American taxpayers have seen their investments crater while simultaneously having to fund the Wall Street bailout with billions of their tax dollars. This gesture by Morgan Stanley is appropriate, and I hope other firms like Merrill Lynch will take it to heart."

Merrill Lynch shareholders on Friday approved the brokerage's acquisition by Bank of America Corp., creating the largest U.S. financial services company. Thain ushered through the combination in September at fire sale prices to avoid a collapse similar to that of Lehman Brothers.

Once the takeover is completed, Thain will be in charge of the combined company's global banking, securities and wealth management businesses. He won't join BofA's board.

Thain joined Merrill Lynch in 2007 after serving as CEO of the New York Stock Exchange. He got a $15 million bonus when he joined the brokerage.

The CEO compensation debate comes as global banks have lost billions of dollars amid a credit crisis that still has yet to be contained. In the last few months, major U.S. banks have taken advantage of a $700 billion government bailout program to help them avoid fates similar to that of storied investment bank Lehman Brothers Holdings Inc., which declared bankruptcy in October.

Goldman Sachs CEO Lloyd Blankfein - and six of his top lieutenants - announced last month that they won't take cash or stock bonuses for 2008.

[noloyalisti]

LET''S START SEIZING THEIR ASSETS. And raise the top tax rate to 95%. They can live with 3 or 4 houses and a couple yachts.

[cheetah-man7]

My heart bleeds for these deserving individuals. Perhaps next year they can get their bonuses - a clear day in the soup line as we are all in a depression. Yes, my heart bleeds for them! yeah, right!

[whiskyrokr]

My heart goes out to these poor exec. How are they going to make ends meet?

[sorceress62]

newster1 :
To you I have this to say: I am an educated woman, I hold 2 Bachelors degrees, 1 in Criminal Justice and 1 in Sociology, so comment means absolutely nothing, you need to know what you are speaking about before running your mouth. HE STILL DOES NOT DESERVE A MULTIMILLION DOLLAR BONUS

[opedanderson]

People are losing their jobs. And these guys are being praised for not taking bonuses?

Fire em all!!!

I would lose my job if I bungled it. No excuses in the real world.....

[tammimiche]

Its sad when people don''t realize that a bonus is just what it is, "A BONUS". It is not a salary. When times are hard, you cut cost and make sacrifices in order to make things work. I am not getting a bonus, let alone a raise but my salary isn''t decreasing, so I can leave within my means. I think these people are greedy, that is why greed is a sin. Why should I, as an "honest" hard-working citizen and taxpayer pay for the mistakes of greedy and selfish individuals. It''s hard enough to be in a tax bracket where I have to pay soooo many taxes that my pay is no where near what was stated in my acceptance letter. If all the bank executives and auto industry executives were to forfit any profit, and contribute some or all of the previous years profit, then maybe they could bail there own company out of debt and hard times. Stop asking for my money, I don''t have much to begin with considering, I probably pay in more taxes that they do.

[antoniof123]

executive gets bonus = libs are losers
executive doesnt get bonus = libs are losers

irrelevant story

Posted by jamesm12341 at 07:36 AM : Dec 09, 2008


But of course conservatives lost big time in the elections so I guess it should also include conservatives are bigger losers.

Just another dumber than dirt conservative trying to make some worthless remark.

[dragonmouse-2009]

Oh Dear...no bonus...how will they ever afford the country club and hookers now.

[farmerbb]

Wait a minute here. This sounds like the EXECUTIVES are the ones who "volunteered" to forgo their bonuses. Where were the board of directors during all this ? It should be THEM who say "No one in the executive ranks gets a bonus this year." What, was the Board asleep at the switch ? Or are they just a figurehead group ?

Here''s hoping Obama passes legislation like I hear they have in Japan. No executive will receive compensation more than one hundred times that of the lowest paid employee. Right now some of these guys get 800 times the average ! Time to fix this.

[jtdev1]

Forget the bonuses, STOCK OPTIONS BABY!!!!!!!!!

[vetsence]

Somewhere, someone said...render unto Ceasar... and go, sell what you have and give it to the poor...

[tincup356]

Seems like if you want a big salary now days you must either, A. be a part of upper corporate America, be a politician, or Be a criminal....wait the first two are criminals I forgot. or C, be a lobbyist.

[longtree-2009]

can''t think of anyone that should get a bonus this year at any level of the work force across the nation. most likely someone, somewhere is getting a bonus and maybe even on wall street where not long ago the media published some 12 billion was to be awarded in bonuses. perhaps, lower level employees on wall street are getting the gold.

[centerfall94]

"No Bonuses For Wall Street Executives"

Sounds right to me, given the state of affairs in the economy. Carry on.

[whitemale08]

Why isn''t Hank the Snake Paulson being investigated for his ''conflict of interest'' with his former employeer Goldman Smacks?

The guy has 400 million in a trust full of Goldman stock.

If he didn''t bailout Goldman, he would''ve lost all of it in bankruptcy.

Paulson is a FRAUD!

[ctla567]

Those thieves got to return the money they legally stole from their companies. Their annual salaries must be cut to less than $1 million each.

[kuei12]

So. Are we supposed to cheer for these thieves since they passed on 1 bank robbery?

[harp1963]

Who cares? Close the country. We''re tired of working all the time so others can live like kings.

[solarrays247-2009]

Well, for one thing they got educated and connections to eventually become *CEO''''s* of multi-billion $ co''''s, whether YOU can pay your bills dosnt matter- get educated and make connections and become a CEO of a multi-billion $ co and call the shots, but quit complaining because you DIDNT do the work or have connections, they DID the work to get there, you didnt, that''''s why they get $10 million bonus and you get $10 in your Xmas pay envelope.

Posted by newster1 at 08:20 PM : Dec 08, 2008

The only work that a lot of them did to get where they are at was to have the right connections along with the rest of their "frat brothers". Carl Icahn has been proven right once again! "It is not what you know...it is who you know!" And Americans are sometimes their own worst enemies! If many others in management had messed up like a lot of these guys....they would be out on the street. I''m not impressed by this particular lot!

[nothappyatall]

Merrill Lynch CEO John Thain

WHO THE HELL ARE YOU THAT YOU SHOULD GET A MULTIMILLION BONUS WHEN THE REST OF US LITTLE PEOPLE ARE STRUGGLING MONTH TO MONTH TO PAY OUR BILLS AND KEEP FOOD ON THE TABLE!

Posted by sorceress62

Well, for one thing they got educated and connections to eventually become *CEO''s* of multi-billion $ co''s, whether YOU can pay your bills dosnt matter- get educated and make connections and become a CEO of a multi-billion $ co and call the shots, but quit complaining because you DIDNT do the work or have connections, they DID the work to get there, you didnt, that''s why they get $10 million bonus and you get $10 in your Xmas pay envelope.