Last year, Merrill Lynch’s John Thain was the highest paid chief executive at a public company in the North East corridor stretching from Washington DC to Boston, according to the Associated Press.
Thain took over as CEO and chairman of Merrill in December, after record-breaking losses forced Stan O’Neal out of the corner office. According to the AP study, Thain took home $83 million in salary, bonus, benefits and perks last year. Although Thain only joined Merrill Lynch in December and was paid a base salary of $57,000, his compensation was boosted by a $15 million cash signing bonus, plus restricted stock and stock options, that Merrill paid to him when he agreed to leave the New York Stock Exchange. Much of that compensation, however, is tied up in incentive pay that Thain won’t be able to access for several years. And those options won’t do him much good if Merrill’s stock price doesn’t recover.
Lloyd Blankfein, the chief of Goldman Sachs, and Morgan Stanley’s John Mack also made the list of top earner. The rest of the list is after the jump.
Merrill Lynch
Goldman Sachs cut its second quarter earning estimates for Citigroup and Merrill Lynch today, predicting that the banks will incur $8.9 billion and $4.2 billion in writedowns, respectively, earning them a place on Goldman’s “conviction sell” list. Way more important recommendation not included in analyst William Tanoma’s formal note, but reported by CNBC’s Darren Rovell to an in-denial Erin Burnett just now? “Conviction sell on the purple cow.” That is right, suck it Williams.
Citigroup, Merrill Estimates Lowered by Analysts [Bloomberg]
A reader breathlessly informs us that he just spotted former Merrill CEO Stan O’Neal on the corner of 55th and Park, “working it,” presumably not in the call-girl sense though one never knows (especially with the high-class hookerss, who just look like well-dressed civilians). “He had his jacket slung over his shoulder, with his finger through the loop, looking pretty slick and talking on his cell. Guess the firing agreed with him.”
Non-profit organization Junior Achievement of New York, which places volunteers in NYC and Long Island class rooms to “teach students about their role in society and how to successfully navigate their futures,” held its annual Stock Market Challenge last night. The fundraiser, sponsored this year by Merrill Lynch, simulates 60 days of trading, with teams (from banks and other businesses) being issued $500,000 in mock dollars that they use to purchase fake stocks before the “opening bell.” They then buy and sell through a “floor trader,” several of which roam the room taking orders. All proceeds go to funding JANY’s programs. Unfortunately, we weren’t invited. Luckily, one participant took copious notes. Normally we’d make you wait for the results (as you would expect, ranking from first to last place is determined by how much “money” each team has at the end), but they’re too hilarious—and telling—not to put out there up front. (You’ll note that Citi did not place in the Top Ten, which had less to with lacking skills and more to with neither participating nor donating to the event, because it was awake at the office doing work.)
1. Best Buy (1)
2. WaMu
3. Merrill
4. Deloitte
5. Keyspan (1)
6. Goldman (2)
7. KPMG
8. Best Buy (2)
9. Keyspan (2)
10. (I forget, but not a big-dog)
11. Pitney Bowes
…….
19. Goldman (2)
Round of applause for John Thain and the enormous restraint he demonstrated in the five months since taking over Merrill Lynch. He could’ve changed the letterhead, shaved his head and asked people to call him LB from Day One, but he resisted, pandered to the “culture of Mother Merrill,” and even ingratiated himself to the team with a few slipups reminiscent of their former CEO, just to make everyone feel at home. Ultimately, though, the temptation to make the firm “not so much Merrill as Goldman” proved too strong. He would’ve had to have the strength of a pro-wrestler/master beekeeper to hold out much longer, and as you well know, Thain is merely a former high school wrestler, and though very passionate about honey, amateur beekeeper at best. So the statement from MER today that JT has hired former GS colleague Thomas Montag to head trading worldwide should come not come as a shock, nor should the whispers (in our head) that he’s rallying hard to bring in erstwhile Goldman Sachs CEO Jon Corzine in some sort of capacity. Though, according to the rumors, the would be hire has less to do with turning Merrill into Goldman than Thain attempting to assuage his guilt about ousting his mentor back in the day, and also to bring Wall Street’s greatest bear hugs back into his life, via payroll. Additionally, DealBreaker has obtained an internal memo sent out to senior management this morning entitled “Drop Everything: Things We Must Do to Become More like Goldman”
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World Economic Forum
Swiss Alps Fail To Cheer Bulge Bracket Leaders, Save For The Ones Dropping Acid
By Bess LevinThree months ago, at the World Economic Forum in Davos, Switzerland, I commented to one of the best-known men in American finance that he seemed pretty glum. He agreed, and said that was true for virtually every financial executive there.
But he said, there was one exception. John Thain, the newly appointed chief executive of Merrill Lynch, was smiling a lot, he said, and with good reason.
Back at home, an uninvited Jimmy Cayne was also feeling no pain.
Related: World Economic Forum: Meeting Of The Minds Or Five-Day Long E-binge? Or Both?
Looking Up, But From A Deep Hole [NYT]
I was curious how high level the Q&A section of the Merrill Lynch call might be and what the “rest of the world” thought of the chaos on The Street. So I enlisted help. I pestered a good friend of mine who is a Junior studying economics at a prominent university, until she agreed to transcribe the Q&A (after I threatened to tell her boyfriend about the shopping spree from last month she caved). Here are her raw notes:
I (Heart) Jeff Heart, since he doesn’t seem to be able to operate his phone. Now thats a questioner.
UBS: You guys are screwed with these impaired securities, right? Even though you tell us they have limited impact on our P&L.
ML: Nah, we are just going to hold them forever.
UBS: You guys are screwed because your leverage ratio is huge right?
ML: Did you not hear John, idiot? John said this. Did you not hear John? We don’t really disclose that. Not really.
UBS: Uh, what about liquidity and can I borrow a cough drop?
ML: Ok, so John mentioned our liquidity pool, and there was our 10-K, and John answered this. Sheesh.
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