BofA: No More 'Typical' Wall Street Pay at Merrill

Fortune relates one part of BofA's (BAC) Ken Lewis’s plan to cut costs at Merrill Lynch (MER):

Lewis is especially anxious to attack Merrill's pay scales. "Merrill was paying typical Wall Street pay," he says. "Their staff people were making a lot more than our staff people. That won't last. We intend to pay market instead."

So BofA’s us-vs.-them integration strategy is alive and well. Nice morale builder! I think I can hear Merrillites updating their resumes now. . . . The key to the success of BofA’s Merrill deal, though, will be broker retention. And the key to that will hinge on the financial packages BofA offers. Stinting not a good idea!

I’m surprised there’s been no word yet: the best strategy is to come up with a fat deal and get it in front of brokers fast, before they get into the habit of taking calls from headhunters. Very suspicious. If Lewis thinks he’ll make his Merrill acquisition work by lowballing the Thundering Herd, he could end up buying a lot less than he bargained for. . . .

Comments

[maddclimber:]

"the best strategy is to come up with a fat deal and get it in front of brokers fast, before they get into the habit of taking calls from headhunters"

Are you kidding me? who is hiring? Which planet do you live on?
The days are numbered for those FAT brokers whose crappy advise wasn't worth a roll of toilet paper.

2008 Oct 10 08:23 AM

[an atheist:]

Stichnoth, what we really need is more idiots like you, cheerleading for obscene rewards for incompetents who have helped bring our system to its knees.

2008 Oct 10 08:32 AM

[luigi0753:]

They can update their resumes til hell freezes - who they going to go to work for - Lehman? Bear Stearns?

2008 Oct 10 08:58 AM

[Ndebttwo:]

Matt must want to maintain his cocktail party status with the brokers. Are you stupid? Perks and pay must come back in line with reality. Millions $ for CEOs for a few weeks "appearance" at an institution. Brokers who make markets without concern. The greed has never been this transparant and I cheer the demise of the outrageous compensation abuse.

2008 Oct 10 09:07 AM

[Ndebttwo:]

Matt must want to maintain his cocktail party status with the brokers. Are you stupid? Perks and pay must come back in line with reality. Millions $ for CEOs for a few weeks "appearance" at an institution. Brokers who make markets without concern. The greed has never been this transparant and I cheer the demise of the outrageous compensation abuse.

2008 Oct 10 09:10 AM

[czxqa:]

You people are all ignorant. He's absolutely right. A broker with a big book can write his own ticket, any time he wants. Where would he go? How about Raymond James, Edward D. Jones, UBS, Smith Barney, Credit Suisse, JP Morgan, hell he can hang a shingle on the side of his house. A broker with a book has a hundred choices, and Merrill brokers have the biggest books of all.

2008 Oct 10 10:34 AM

[NoBoat:]

"Where are the customers' yachts?"
--Anon visitor to Wall St, upon seeing a fleet owned by various brokers, 1955

2008 Oct 10 10:58 AM

[Humbert:]

It is all coming home to roost. The brokerage arm of merrill lynch is sooo morally bankrupt this was bound to happen eventually -- credit crisis or not. I think it is pretty funny that this clown is talking about paying up to keep merrill "talent" Who is gonna pay them? Morgan Stanley? Bear? Lehman? UBS?. The only firm that has money is Goldman Sachs and they can get Merrill's clients without getting the scumbag brokers. Goldman would never allow the retail sleaze contaminate them. I could see JPM picking up a few folks but they run a different model from Merrill. They actually try to have educated and competent advisors vs. the used car salesmen at Merrill. And if you have met a real Merrill broker, you know what I mean. Mustaches, gold bracelets, nugget rings...The Thundering T$$D

2008 Oct 10 11:40 AM

[contradan:]

How much money do you think the average customer in one of MER's brokers' "books" lost this year?

2008 Oct 10 02:51 PM

[cpmod:]

Not only do you think like a broker you look like one. Are you on drugs?

2008 Oct 10 06:01 PM

[nyka:]

maddclimber -- try ADVICE, not advise

2008 Oct 10 07:29 PM

[nyka:]

czxqa--Biggest books -- and smallest wallets. Brokers are no different than car salesman. And you know their present-day status, particularly if they're employed by a GM dealership.

2008 Oct 10 07:48 PM

[34CD77:]

Its almost amusing to read all this total garbage, Obviuosly most of your writers are trash collectors etc. Good brokers are probably as educated as lawyers. They are highly schooled and do give good advise. Granted they are not privy to what goes on in exectutive meetings and unfortuately do receive and act on bad information. However....they are honest and can not be blamed for all the public excesses and unfortunate lack of any spending habits. Buy everything today and pay tomorrow. Look as good as your neighbor who makes twice what you do. etc etc. Don't blame broker's for the economy.
Lastly, the best brokers have always gone to Merrill, and Goldman....because their clients insisted in haveing the best! This still applies.!

2008 Oct 11 10:38 AM

[34CD77:]

No one was responsible for the great Wall Street Crash. No one engineered the speculation that preceded it. Both were the product of the free choice and decisions of thousands of individuals. The latter were not led to the slaughter. They were impelled to it by the seminal lunacy which has always seized people who are seized in turn with the notion that they can become very rich.

2008 Oct 11 10:50 AM

[c smith:]

How about Raymond James, Edward D. Jones, UBS, Smith Barney, Credit Suisse, JP Morgan, hell he can hang a shingle on the side of his house.

This comment shows how out of touch czxqa is. Does he believe that RJF is in anywhere near the position that MER was in comping it's sales team? The others he mentions are in nearly as much distress as MER. Hang out a shingle? Yea. You want to talk about a pay cut? I've done it. Managing customers AND employees AND compliance AND systems AND managing money all at the same time might be a tad harder than he thinks. Talk to Schwab, big guy (I have it on good authority that they're looking for producers). The number they suggest might just shock you, and not in a good way. Best of luck!

2008 Oct 12 10:21 AM

[psusense:]

So, the big question is, *where* will Merrill's brokers find new employment?

2008 Oct 13 12:48 AM