Caught between bonuses and a government bailout
Paying bonuses to bank executives is going to bring out the populism in everyone, especially when it’s one of the biggest recipients of taxpayer handouts. The New York Post reports that the Bank of America is earmarking big bucks to keep top talent.
Among those who are said to have received payouts are two former Merrill Lynch bankers, Fares Noujaim, who was recently appointed as BofA’s vice chairman of investment banking, and Harry McMahon, a well-connected West Coast-based banker. Both were offered guarantees not to leave the firm.
Noujaim, a former Bear Stearns banker who joined Merrill last year, is said to have received roughly $15 million over two years.
Sources say Noujaim — a well-regarded banker focusing on the Middle East — was offered a vice-chairman role, and may have been offered at least $5 million more to stay. His earlier employment contract was nullified once Merrill merged with BofA earlier this year, sources said.
The bank disputes the numbers, but confirms that it’s doling out bonuses to retain top talent.
Though I’m the last person to defend hefty payouts given scope of the bailout (see previous post), it’s likely we’re going to see and hear more about the compensation getting ramped up in the months ahead. Wall Street firms are increasingly on the prowl for talent now that the market is back on it’s feet, meaning the aggressive bid for top money makers is going to make it exceedingly difficult for weak banks to stay competitive.
So, brace yourselves for another round of bonus debates.