Bank of America primary hit the news as one of the most important banks receiving TARP funds. The state strain tests found that Bank of America required $33.9 billion in assets just to live on. When that information came out, they began selling extra stocks and selling off assets in order to raise such a great amount of assets and they succeeded, Now that Bank of America has made some brilliant financial decisions and produced billions of dollars in assets, they are spending millions in bonuses, hoping to tempt and preserve talent.
This is understandably reminiscent of AIG giving out TARP money as bonuses and taking an executive island retreat on the taxpayers dime. When AIG paid out those millions of dollars in bonuses, they were referred to as preservation payments, making positive the talent they already had did not decide to go to a stronger company. Now Bank of America is doing the similar thing.
It is expected Bank of America will not see the harsh national uproar AIG saw because its not exactly on the taxpayers dime. Bank of America is giving out capital they raised which they can do what they want with. Though, with Bank of America doing through the Merrill Lynch joining situation and still being pretty frail, it makes experts and the public speculate if they should be spending all these dollars in retention bonuses.
Among the staff who allegedly received the retention bonuses are two past Merrill Lynch bankers, Fares Noujaim, a ex- Bear Sterns financier that joined Merrill Lynch last year, of late selected vice chairman of investment banking at Bank of America, and Harry McMahon. Noujaim is thought to get $15 million paid over the course of two years. Both men were offered these bonuses in exchange for the assurance not to evacuate the company. Apparently the Merrill Lynch union is going through after all.
Competitive recruiting in investment banking and assets markets continues to be incredibly powerful and were taking the steps necessary to hang on to vital talent in response to competitive pressures. spokesperson Jessica Oppenheim said to the New York Post. She also went on to say that any detailed reports as to the amount of money Noujaim is being paid is not correct, calling them erroneous. Many news organizations have attempted to make contact with Bank of America directly considering this new development but to no avail.Find out further about
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