ABSTRACT
The year 2008 was a bad one for Merrill Lynch. The company lost over $12 billion and,in order to avert total bankruptcy, had to agree to a humiliating acquisition by Bank of America, one of its former competitors. The general perception of the public at large was that Merrill Lynch was a total failure, and that this was largely due to the bad decisions of its overpaid executives. Most people felt that even the Bank of America buyout was only made possible because of the large government bailout granted to the banking industry-a bailout that was funded by American taxpayers.1 With this as background it is easy to understand why the world was shocked when the CEO of Merrill, John Thain, requested a $10 million bonus for the year from the company’s compensation committee.2
