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Cuomo Letter to Merrill Lynch's Board

Cuomo Letter to Merrill Lynch's Board

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Published by DealBook
From DealBook: The letter from New York Attorney General Andrew M. Cuomo to Merrill Lynch's board, warning it of paying out bonuses to John Thain and other company executives.
From DealBook: The letter from New York Attorney General Andrew M. Cuomo to Merrill Lynch's board, warning it of paying out bonuses to John Thain and other company executives.

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Published by: DealBook on Dec 08, 2008
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05/09/2014

 
STATE
OF
NEW
YORKOFFICE OF THE
A
lTORNEY
GENERAL
120
BROADWAYANDREW
M.
CUOMO
Anomey General
NEW
YORK,
NY
1027]
(212)
416-8050
December
8, 2008Board
of
Directors
of
Merrill Lynchc/o Corporate SecretaryMerrill Lynch
&
Co., Inc.222 Broadway, 17th Floor
New
York,
New
York 10038Re: Bonus PoolsDear
Members
of
the Board:As
you
know, this Office is conducting an ongoing inquiry into various aspects
of
executive compensation at Wall Street firms, including Merrill Lynch
&
Co., Inc.
On
October29, 2008, we asked
you
to detail, among other things,
your
plans for executive bonuses this year,including the criteria
you
plan to use in determining what,
if
any, bonuses are appropriate for
your
top executives.
OnNovember
5, 2008, the Board responded and stated that any bonuses would be basedupon a combination
of
performance and retention needs. In Iight
of
these factors, current reportsthat the Board is considering giving
Merrill's
Chief
Executive Officer a $10 million bonus arenothing less than shocking.Utilizing
Merrill's own
criteria, a bonus
of
this size appears unjustified. In terms
of
performance, Merrill has reported losses for every quarter this
year
and has lost more than $11billion for the year as a whole. Indeed,
Merrill's
decision to be taken over by
Bank
of
America
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 significantbonuses for its top executives, including the CEO.With respect to retention, it is our understanding that
Bank
of
America has alreadydetermined that
Merrill's CEO
will run the merged
company's
global banking, securities, andwealth
management
businesses. Thus, the need for retention does not appear to justify asubstantial bonus for him.
As
we stated in our letter in October, in this new environment, it is vital that Boards
of
Directors demonstrate independence and complete devotion to corporate responsibility.
It
is

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