Cuomo: Dammit, someone got bonuses!

Posted by Marc Hodak on January 27, 2009 under Executive compensation, Politics | Read the First Comment

The drama over John Thain and Ken Lewis, Merrill Lynch and BofA, and the government’s loan to Wall Street, gets juicier.

Chapter One:  Merrill hires Thain to salvage what he can of the troubled hulk.  Thain sells off toxic loans to a hedge fund, and then the dolled up Merrill to BofA, for many billions, all just before the fan is hit by a stinking mound.

Having just preserved a boatload of value for his shareholders, Thain wants to make sure his team is rewarded for it.  He knows that BofA’s management won’t be sympathetic to getting taken for a ride once they figure it out, and would probably stiff the Merrill team when given the chance, so he pays out bonuses to his guys in advance of the sale.

Chapter Two:  BofA’s stiffs Thain.  Then they fire him, and unleash a barrage of bad press about him.  The media laps it up.

Chapter Three:  Enter Andrew Cuomo.  Never content to leave criticism of high profile executive compensation to others, Andy subpoenas Thain over the Merrill bonuses.  Ahh, the mystery deepens.  What is Cuomo alleging?  Under what law is he acting?  What public interest is he seeking to protect?  (Silence.)  Oh yeah.  Nevermind.

So, while New York state waddles toward its own spectacular bankruptcy due to the epic profligacy and rampant corruption of its legislators, Andy is chasing headlines about the pay of certain executives of a then-completely-non-state-owned company who had just pushed their grateful shareholders out of the way of a hollow-point bullet.

Why doesn’t Cuomo follow the path of his famous predecessor, and go after easier targets?