BoA Merill in bonuses row
BANK of America Merrill Lynch (BoA Merrill) was facing a storm over its use of taxpayers’ funds yesterday despite denying reports that it paid out millions of dollars in retention bonuses without having paid back $45bn (£27.5bn) in state loans.
The bank’s new vice chairman of investment banking, Fares Noujaim, along with one of its top bankers Harry McMahon, are among those said to have been offered lucrative bonuses to ensure their loyalty.
Noujaim, who joined Merrill Lynch last year before it was taken over by BoA in a $50bn deal, was reported to have been given around $15m over two years.
A spokesman for the bank yesterday said that neither Noujaim nor McMahon had received any retention bonus at all.
But she stopped short of saying that the bank would not pay such bonuses to hold on to talented staff.
“Competitive recruiting in investment banking and capital markets continues to be very intense and we’re taking the steps necessary to retain key talent in response to competitive pressures,” she said.
BoA Merrill chief executive Ken Lewis has been no stranger to clashing with US regulators, claiming earlier this year that the Federal Reserve had pressured him into the deal to acquire Merrill Lynch.
Fed officials lambasted Lewis in emails later uncovered by congressional investigators, including one from Fed chairman Ben Bernanke, who described Lewis’ threat to pull out of the deal as a “bargaining chip”.