One year on from their hasty union with Bank of America, and Merrill bankers remain unable to put last year's $3.6bn bonus pool behind them. Instead, the issue is flaring up, just as this year's bonus decisions come into view.
BofA's eagerness to pay a $33m fine and thereby put an end to allegations that it misled shareholders over the overflowing Merrill bonus pot, has been unexpectedly rejected by a US district court judge. As a result, the bank faces a court case in the next few months, while also fighting a parallel case regarding disclosures about the Merrill transaction, headed by Andrew Cuomo.
None of this augurs particularly well for bonuses paid to legacy Merrill bankers for their efforts over the past 9.5 months. This is a shame, as they've been responsible for a large proportion of the combined bank's revenues this year, and according to analyst Dick Bove may have added $6.5bn to its bottom line. Admittedly, some Merrill bankers are on retention packages, but only a few. The rest must be fearing that 2009 will be a lot less lucrative than 2008.
We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. (Reuters)
Gordon Brown is 'appalled' by bonuses. (BBC)
Barclays is one of only a handful of banks to use economic profit as a basis for bonus payouts. (Guardian)
Bob Diamond: banking is a 'risk business' and bonuses shouldn't reward failure. (Bloomberg)
A global set of rules for banker pay would entrench existing players. (Bloomberg)
Traders must spend some National Service time at the regulators. (Fintag)
Conduit Capital Partners and Reynolds Partners have been hiring. (Financial News)
Paternoster has cut staff by 20%. (Financial News)
PSigma, investment management firm has appointed Geoff Cooper to its investment team. (City AM)
Hedge fund manager accuses London of being rich and lazy. (Financial News)
Goldman, not Lehman, was the turning point. (Daily Beast)