Bailed-Out Merryl Gives Billions In Bonuses

It's unforgivable. An affront to society, to justice, and to Americans' trust in the integrity of financial markets. Merryl Lynch management, which drove the company into the ground (forcing an eventual federally-assisted acquisition by Bank of America), recipient of billions in federal aid and guarantees, accelerated its bonus schedule and doled out $4 billion to its executives at the end of 2008. That makes $15 billion in bonuses for 2008...a year that saw ML lose $25 billion. And much of that bonus money will be taxed as capital gains, rather than ordinary income...

I've often said that one of the main problems with America's version of capitalism is that it entails no risk for those at the top entrusted with making decisions. Pay packages for the CEOs of even mid-sized companies are large enough to make them comfortable for life, even if they perform poorly. This skews incentives...corporate "leaders" will take risks that others (employees, shareholders, and now the public) have to bear, in hopes of a gigantic payday. And sometimes, they get that payday even when they fail.