CEOs Finding Coal, Not Bonuses, in Stockings This Year
CEOs of financial companies are embarrassed into giving up bonuses this year.
Dec. 13, 2008 — -- It's the season for Wall Street bonuses. But this year, the average investor is watching.
In a time of staggering losses, massive layoffs and talk of a global economic recession, the issue of executive end-of-year pay has become a lightning rod for investors angry over Wall Street's excesses.
Last year, bonuses in the financial sector totaled more than $33 billion.
This year, the CEO's of several top firms, including Morgan Stanley, UBS and Goldman Sachs, have said they won't be receiving any bonuses, which used to make up as much as 60 percent of their annual income.
Taking the most drastic step yet, Morgan Stanley has said the bonuses it gives to mid-level employees will come with a so-called "clawback" option, which will allow the company to recoup money paid out to employees whose bets on the market go terribly wrong.
Some top executives seemed slow to follow suit.
The Wall Street Journal reported this week that John Thain, CEO of Merrill Lynch, which received funds from the $700 billion government bailout plan implemented this fall, was "sparring" with the board over his bonus.
Thain had reportedly been asking for an end-of-year extra of up to $10 million.
Outside Merrill Lynch's headquarters that day, investors told ABC News they were furious.
"He doesn't deserve it," said one woman who says she owns stock in the financial firm.
"What about the little people?" another man asked. "Are the little people getting anything? Little people count first."
Later that day, Thain told the board he would not ask for a bonus after all.
Still, some in the financial industry argue that if anyone deserves an end-of-year extra, it's Thain.
Thain joined Merrill Lynch in 2007 when the firm was already in trouble, and is credited with keeping it from collapsing like Lehman Brothers, which filed for bankruptcy in September.
Instead, Thain oversaw Merrill Lynch's acquisition by Bank of America, a takeover that will produce the nation's biggest financial services company.
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