Top Executives Declining Year-End Bonus

Banks are facing mounting criticism from the public and taxpayers for their exuberant bonus pay out despite the global financial turmoil.

Billions of government money is now being used to bail out ailing companies and instead of strategizing their way to brace the difficult times, more money is continued to be spent to reward the highly paid bankers.

More than $70 billion are made available by top banks in Wall Street as staff in banking and financial institutions are waiting in line for fat year-end bonuses and compensation.

The biggest victims of all? The tax payers.

However, a few of the world’s top bank executives intend to lead by example and made themselves exceptions.

Jamie Dimon, the chief executive of JPMorgan Chase & Co, had been reported to have declined his share of 2008 bonuses, which would mount up to a few million dollars. JPMorgan was bailed out through a $25 billion cash injection by the US Treasury Department recently.

Apart from Dimon, Goldman Sachs CEO Llyod Blankfein as well as Merrill Lynch CEO John Thain have also followed suit by agreeing not to receive their bonus this year. Apart from its CEO, Goldman will also impose a major bonus pay cut to about 400 of the bank’s partners below the $1 million figure as the company recorded its first quarterly loss in a space of 10 years. Last year, each partner received a staggering amount between $5 million to $29 million in bonus pay out, making them as Wall Street and London’s highest paid partner executives.

Merrill Lynch was rescued through an acquisition by Bank of America on the same day another investment firm, Lehman Brothers went bankrupt.

Massive Job Cut for Bank of America

The Bank of America, BoA intends to make itself as the new world’s largest bank, but it will come not without collateral damages. And the damage will not look pretty.

The bank, which acquired Merrill Lynch on the day Lehman Brothers went bust in September, announced that up to 35,000 jobs will be cut in the next 3 years. All divisions and business units will be affected with the job cut.

Merrill Lynch acquisition involves a $50 billion rescue deal, with the result of the merger seeing a new, combined workforce total of more than 300,000 employees worldwide. Prior to the merger, Bank of America had close to 250,000 employees while Merrill Lynch had 60,000. The 35,000 figure represents about 11% of the new total employee size.

The acquisition will also turn BoA as America’s largest bank by asset. It will double its investment banking business, as well as own the largest retail brokerage business. Bank of America’s rival, Citibank recently announced a layoff of 75,000 people.

While the final details of the layoff will only be released next year, any impending news shall be deemed as bad.