Thursday, March 5, 2009

Fight For Your Share(holders') Rights

The Wall Street Journal wrote a great story yesterday detailing the compensation Merrill Lynch handed some of its employees ahead of its merger with Bank of America. All together, 160 employees made more than $3 million -- 11 of those over $10 million -- despite Merrill losing $27.6 billion for shareholders. Given Merrill’s performance last year, I found most of these payments rephrehensible. But the stonewalling Bank of America has done refusing to reveal the compensation levels is equally outrageous.

Mr. Cuomo is examining the Merrill bonuses to determine whether the firm violated any securities laws related to public disclosure. Bank of America is expected to file a motion on Wednesday in New York State Supreme Court to keep the compensation data from becoming public. Next week, Mr. Cuomo intends to make his case that the data shouldn't be kept confidential. A judge is expected to rule on March 13.

"Merrill Lynch was an independent company for the three-year period covered, and made the decisions on compensation," said a spokesman for Bank of America. "Bank of America continues to be concerned about the right of privacy of any employee."

 (Also take note of the cowardly BoA spokesman who likely told the reporter not to use his name.)

As a taxpayer, I’m entitled to know what my town and state pay their employees. Through a simple database search, I can find out the salary of every Verona employee, from our town manager (who makes $164,008) to a new teacher at my elementary school (who makes $46,245 ). As a shareholder of a company*, why shouldn’t I be given these same privileges? After all, as an owner of a company, these people are my employees. They work for me. Don't I deserve to know how much I'm paying them? 

The board of directors at these firms failed during the last crisis. Shareholders must stand up for their own rights to help us prevent the next one.

*I don't actually own any Bank of America stock, I'm just speaking generally

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