The top executives of American entities Merrill Lynch and Morgan Stanley will forego their yearly bonuses amid the Wall Street executives coming under fire for the ongoing financial turmoil, say media reports.
"The top executives at Merrill Lynch and Morgan Stanley, led by their chief executives John Thain and John Mack, will not receive bonuses this year amid growing pressure on Wall Street leaders to share the pain of the financial crisis," the Financial Times has reported.
Interestingly, a Wall Street Journal report on Monday said that Thain had suggested to directors he deserved as much as USD 10 million for his bonus this year.
According to the Financial Times, Morgan Stanley is the first large American bank to announce that employees would be forced to pay back some of their bonuses if they caused significant losses, or reputational harm, to the company.
Further, the publication, quoting persons familiar with the situation, said that Thain told Merrill's board that he and other top executives, including President Gregory Fleming and chief financial officer Nelson Chai, would not receive a bonus.
Attributing to a memorandum by Mack to Morgan Stanley staff, the report published online on Monday said, "Given the extraordinary challenges facing the financial industry, he and the company's co-presidents, Walid Chammah and James Gorman, would forego their bonuses."
Moreover, it is the second straight year Mack has not received a bonus. "His year-end payments for 2005 and 2006 totalled about $54 million, but they were all in shares," Financial Times added.