John Thain, the former Merrill Lynch & Co. Inc. chief executive ousted from Bank of America Corp., said Merrill's yearend bonus pool shrank 41% from a year earlier and was much smaller than the deal with B of A allowed.
A B of A spokesman said Monday: "John Thain and the Merrill Lynch compensation committee made the decision on the amount and timing of yearend compensation at Merrill Lynch. We had no legal right to challenge it."
There had been reports that Mr. Thain, who was hailed last year for organizing the Merrill sale, rushed out billions in yearend bonuses for employees at a time when his company was aware it would post large fourth-quarter losses.
He said in a memo that Merrill's large fourth-quarter losses were "incurred almost entirely on legacy positions and due to market movements," and that Merrill was completely transparent with B of A about the losses during the merger process.
The comments were made weeks after the federal government agreed to invest an additional $20 billion in B of A to make sure it did not back out of the Merrill deal.
Mr. Thain has also been criticized in recent days over purchases he made for his office as he was trying to cut costs at Merrill. He said Monday that the $1.2 million of purchases in question covered renovations for his office, two conference rooms, and a reception area.
"The expenses were incurred over a year ago in a very different environment," he said, but he called them a mistake in light of the current conditions. He also said he would reimburse the company for the expense.
Also Monday, B of A said it has cut 1,900 positions in London as part of its plan to cut 35,000 globally over the next three years.
The Charlotte company had said last month that it would finalize its job cuts this month.