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| Dec 09, 2008 4:07 pm |
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re: Merrill CEO bonus is 'shocking' |
Kurt Schweitzer
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(Note: I'm not trying to defend this guy's bonus. I'm simply trying to illustrate the thinking that MIGHT be behind it.)
From the article:
"As losses accelerated, Thain orchestrated the deal with Bank of America in September to save 94-year-old brokerage.
"The deal valued Merrill at $50 billion at the time. Bank of America shares have fallen 46% since then, putting the value on the merger at just under $20 billion as of Friday."
Thain is credited with "saving" the brokerage, which is currently worth $20 billion. He's asking $10 million for doing this.
Suppose someone "saved" your $20,000 business. Would you be upset about paying him a $10 bonus?
Proportionally that's all Thain is asking - $10 for every $20,000 that the business is worth. Only 0.05%
For some reason people confuse "million" and "billion". I think they are both equated to "really big", so when someone "saves" a $20 "really big" business and then asks for a $10 "really big" bonus, it looks like he's asking for half of everything that business is worth. Which simply isn't the case.
Now, should he be receiving a "really big" bonus at all, no matter what he's done? I personally don't think so, but that's partly because I've yet to have any "really big" dollars of my own. Maybe when I get that rich I'll see things differently.
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer (new win) |
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