To pay bonuses or not to pay?

December 8, 2008 | By Jim Kim

In some cases, the issue of whether to pay bonuses is an easy one. If a bank ended up with millions upon millions of losses that really stuck it to shareholders, the bank's executives really do not deserve a bonus. That there was any doubt about this, regarding Citi, was troubling. In some cases, banks will rightfully judge the PR consequences of big bonuses to be too dire, even if the bank made money in 2008--hence the decision at Goldman Sachs. The acceptance of TARP funds adds a wrinkle, which brings us to Merrill Lynch.

The Wall Street Journal reported that Merrill CEO John Thain has suggested that he receive a $10 million bonus for 2008. The board is debating that now, and many feel they will offer him a bonus, but a much smaller one. Andrew Cuomo has called the idea of Thain getting such a bonus shocking, noting that Merrill lost $11 million in 2008. Then again, Thain likely saved the company with a deal with Bank of America. So what do you think.

For more:
- here's the AP article on Thain