Remember how Bank of America's Ken Lewis axed John Thain after the FT broke news of Merrill's outsize bonuses? This morning's FT has another nice scoop:
Bank of America played a role in Merrill Lynch's controversial decision to pay $4bn in bonuses in December just as mounting losses were threatening to derail BofA's takeover of the Wall Street firm, according to people close to the situation.
BofA has said that the payment of $4bn in compensation in a fourth
quarter in which Merrill racked up $15bn in losses was sanctioned by
John Thain, Merrill's chief executive.
Ken Lewis, BofA's embattled chief executive, ousted Mr Thain on
Thursday after news of the bonus payments appeared in the Financial
Times. BofA told the FT last week that Mr Thain had made the decision
to pay bonuses in December instead of January and it had been
"informed" of the move. The bank said Merrill was an independent
company until the deal closed on January 1.
However, a person familiar with Mr Thain's actions said the ousted
chief had at least two conversations with BofA's chief administrative
officer, J. Steele Alphin, one of the bank's most senior executives,
before a December 8 board meeting at which Merrill's bonus payments