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Almost everyone can agree that Wall Street's top brass made entirely too much money, especially in hindsight. Heck, if you paid me $50 million a year to run a company into bankruptcy, I'm pretty sure I could do it, too.
And whether you're for or against the $700 billion bailout, almost everyone can agree on another point: If Wall Street firms get a dime of government money, there should be strict, stringent, and inarguable caps placed on executive compensation. That's about as fair as it gets.
Thankfully, there are. Part of the bailout bill includes a clause that caps the amount of pay a company can deduct on its top-five executives at $500,000 a year.
Why it only covers five people, we may never know
For one sneaky Merrill Lynch (NYSE: MER ) employee, not being part of that prestigious "top five" just scored him a nice eight-figure windfall for no more than a few months work.
Peter Kraus, a former Goldman Sachs (NYSE: GS ) executive recruited to Merrill in September to lead the firm's "growth-and-acquisitions strategy," could walk away with as much as $25 million when Merrill merges with Bank of America (NYSE: BAC ) , which is expected to happen before years' end. Never mind that Merrill won't acquire anything and certainly hasn't grown: pay for performance has never been big on Wall Street, anyways.
What's a little sketchy is that Kraus was hired, of course, by Merrill CEO John Thain, another Goldman Sachs alum. I'm merely guessing, but I'm sure these guys have been buds for a while and his lucrative pay package was at least given a nod by Thain. It's a tight-knit group, these financial buckaroos.
Sounds all too familiar
Of course, this isn't the only absurd pay story of recent months. Washington Mutual CEO Alan Fishman was granted $19 million for 18 days work, during which time WaMu spiraled into bankruptcy.
Regardless, this is the first, and hopefully last, display of arrogance shown since the Treasury pumped billions of dollars into banks last week. Part of the $25 billion injected into B of A last week was based on the pending Merrill acquisition. We don't know how much was set aside for Merrill, but it really doesn't matter. Taxpayer money was used to prop up a bank where someone -- the director of strategy, of all people -- could walk away with $25 million for four months work.
That should make you sick.
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