In case you missed it, today's Wall Street Journal reports that Merrill Lynch CEO John Thain is lobbying the compensation committee of the board of the directors for a $10 million bonus.
According the article: "Mr. Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, say people familiar with his thinking."
Help me out. Maybe I am stupid, but I want to make sure I follow Thain's logic here:
1. We made bad bets on sub-prime mortgages.
2. We've lost almost $12 billion so far this year as a result of those bad bets.
3. We took $10 billion in taxpayer money from the $700 billion TARP (actually, Merrill was required to take that money, but whatever. Now we have it.)
4. When I took over as CEO about a year ago, Merrill stock was at $50. Today it is trading at $15.
5. Before the bottom totally fell out, I managed to sell the company to Bank of America for $16.5 billion, down from $50 billion when it was announced...
... so I therefore should get a $10 million bonus because, you know, $11 million would be showy and $9 million, well, that would just be an insult.
Ah - now it makes sense. I guess when you compare Thain to Dick Fuld of Lehman, he is a veritable genius.
Mr. Thain - we have an old saying in the PR business: "If it doesn't look so good on the front page of the Wall Street Journal, you probably shouldn't do it."
Here endeth the lesson.