A friend of mine just sent me a link to the following article: Former Merrill exec gets $25 million for doing nothing; buys co-op – BloggingStocks. The article talks about one particular Merrill Lynch executive who walked away with a $25M golden parachute after being on the job for a very short while.
Here’s a pretty awesome deal: Work for Merrill Lynch for a few days until it’s acquired by Bank of America Corporation (NYSE: BAC) and receive a $25 million golden parachute.
Now, I realize that the BofA takeover of Merril Lynch was a firesale more than a government bailout, but the article did make me think more about the issue of could this happen in a bailout? Since a bailout doesn’t go through the bankruptcy process, companies cannot invalidate their sometimes ridiculous employment contracts to avoid situations like this. This is one of the reasons why I dislike the bailout process as opposed to a structured bankruptcy.
