I find it unbelievable that Bank of America is buying Merrill Lynch for a 70% premium ($29/share). If you remember, earlier in the year they also picked up troubled mortgage lender Countrywide for a premium.
It’s amazing they would pass up a deal to buy Lehman Brothers which likely could of been had for a deep discount. Do you think that government played a role behind the scenes? Just how bad are Lehman’s books that nobody wants to but them?
At about this time, most employees are finding out what their raise is going to be for the year. Typically, this raise is based on the employee’s performance for the past year. Some will be rewarded for the good work they performed. While others won’t get anything because their performance wasn’t deserving of anything. Fair enough!
Too bad the same standard wasn’t used for outgoing CEOs. Once again, we see a CEO being rewarded for running a company into the ground. This time it’s Angelo Mozilo of Countrywide Financial Corp. Reports indicate that he’ll take home a cool $83 million in severance pay when Bank of America closes the deal. Here’s why -
Mozilo is entitled to three times his annual salary and three times his average bonus over the past two years in the event of a takeover, the lender’s December 2006 regulatory filings show. –Bloomberg
This even after the company’s stock lost 79% of its value last year.
What do you think? Should a CEO be highly compensated even if they run a company into the ground?
