Wall Street entitlement menality bites taxpayers again

Ripped from the bizwire ... Bank of America is forced to fire former Merrill-Lynch CEO after word got out that he paid out $15 billion in bonuses after Merrill took $10 billion from the TARP:

By STEPHEN BERNARD and IEVA M. AUGSTUMS

AP Business Writers

NEW YORK (AP) -- Media reports say former Merrill Lynch & Co. CEO John Thain has resigned from Bank of America Corp.

CNBC and The Wall Street Journal's Web site are reporting that Thain resigned after a meeting of Bank of America executives Thursday morning. The reports followed news that Merrill had moved up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America on Jan. 1.

A Bank of America spokesman declined to comment.

Thain was heading a wealth management division of the two firms' merged businesses. He went to Merrill Lynch after leading the New York Stock Exchange and before that, serving as chief operating officer at Goldman Sachs.

Merrill, which reported a $15.45 billion fourth-quarter loss, was acquired by Bank of America in a government-brokered deal the same day the Lehman Brothers Holdings Inc. collapsed.
Bank of America has increasingly come under criticism in recent weeks for its acquisition of Merrill Lynch. The deal forced Bank of America to ask for a second multibillion dollar investment from the government as it absorbed the mounting losses at the New York-based investment bank.

On Thursday, Bank of America said it knew of Merrill's plans to more up the bonuses.

"Merrill was an independent company until Jan. 1 of 2009,'' said Bank of America spokesman Scott Silvestri. "John Thain decided to pay year-end incentives in December, as opposed to their normal date in January. Bank of America was informed of his decision.''

Bonuses were not paid, though, to 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 -- who requested they not receive additional compensation.

Shares of Bank of America tumbled 93 cents, or 13.9 percent, to $5.75 in late morning trading as the overall market also fell sharply. Bank of America's loss was steeper than most other major financial stocks.

Bank of America last week struck a deal with the government to receive an additional $20 billion in funds as part of the Treasury Department's bank investment program. The government also agreed to backstop losses on additional assets. The investment comes after Bank of America already received an initial $25 billion as part of the program.

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A Bank of America spokesman declined to comment.

Thain was heading a wealth management division of the two firms' merged businesses. He went to Merrill Lynch after leading the New York Stock Exchange and before that, serving as chief operating officer at Goldman Sachs.

Merrill, which reported a $15.45 billion fourth-quarter loss, was acquired by Bank of America in a government-brokered deal the same day the Lehman Brothers Holdings Inc. collapsed.
Bank of America has increasingly come under criticism in recent weeks for its acquisition of Merrill Lynch. The deal forced Bank of America to ask for a second multibillion dollar investment from the government as it absorbed the mounting losses at the New York-based investment bank.

On Thursday, Bank of America said it knew of Merrill's plans to more up the bonuses.

"Merrill was an independent company until Jan. 1 of 2009,'' said Bank of America spokesman Scott Silvestri. "John Thain decided to pay year-end incentives in December, as opposed to their normal date in January. Bank of America was informed of his decision.''

Bonuses were not paid, though, to 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 -- who requested they not receive additional compensation.

Shares of Bank of America tumbled 93 cents, or 13.9 percent, to $5.75 in late morning trading as the overall market also fell sharply. Bank of America's loss was steeper than most other major financial stocks.

Bank of America last week struck a deal with the government to receive an additional $20 billion in funds as part of the Treasury Department's bank investment program. The government also agreed to backstop losses on additional assets. The investment comes after Bank of America already received an initial $25 billion as part of the program.

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