Merrill Lynch & Co plans to cut year-end bonuses in half after more than US$20 billion in losses that forced the US securities firm to sell itself to Bank of America Corp, two people with knowledge of the situation said.
The average bonus reduction will be about 50 percent at the New York-based company, and some traders and investment bankers will face steeper cuts, said the people, who declined to be identified because the plans aren’t public.
While employees won’t find out their bonus amounts until later this month, division managers are being told now how much they’ll get to distribute.
Merrill’s revenue through September fell 96 percent from a year earlier, forcing chief executive officer John Thain to slash compensation — the firm’s biggest expense. Congressmen and regulators scrutinizing Wall Street pay have sought to ensure that economic-rescue funds from the US government are used to stimulate lending and not to enrich executives.
The drop in bonuses at Merrill would be less severe than the 70 percent average cut for all Wall Street firms that compensation consultant Johnson Associates predicted last month. Bonuses make up the bulk of a year’s pay for most traders and investment bankers, and they usually fall when markets sour.
Merrill spokeswoman Selena Morris declined to comment.
Hit with mortgage-bond writedowns and plunging investment-banking fees, Merrill may report a loss this year of US$13.3 billion, based on the average estimate of nine analysts surveyed by Bloomberg. That would be almost twice as wide as the US$7.8 billion loss for last year, then a record for the 94-year-old firm.
Meanwhile, Goldman Sachs Group Inc’s exposure to the volatile stock markets is prompting analysts to predict a steep loss for the company’s fiscal fourth quarter.
On Tuesday, UBS analysts predicted Goldman would lose US$5.50 per share for the quarter ended Sunday, compared with a previous estimate for a loss of US$0.40 per share.
The UBS adjustment comes a day after Credit Suisse analyst Susan Roth Katzke predicted the bank would lose US$4 per share. She had previously estimated Goldman would earn US$2.47 per share. It also comes as the Wall Street Journal, citing unnamed industry insiders, reported on Tuesday that Goldman could be in line to post a US$2 billion quarterly loss, which would be equivalent to about US$5 per share.
Analysts polled by Thomson Reuters, on average, forecast Goldman would lose US$1.06 per share for the quarter. Just a month ago, analysts were projecting Goldman would earn US$1.62 per share.
The loss would be Goldman’s first quarterly loss since it went public in 1999.
A spokesman for Goldman declined to comment, saying that Goldman does not provide earnings guidance and does not comment on outside forecasts.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)