Bank of America pays $33 million in SEC Fines for Excess Bonuses
Employee bonuses continue to be a hot political issue. The most recent exhibit was the SEC's announcement on Monday that Bank of America would pay $33 million in fines for not telling its shareholders that Merill Lynch would be allowed to pay $5.8 billion in executive bonuses prior to its merger with BofA.
While BofA's shareholders have every right to be upset about the non-disclosure, they must surely be wondering what good was accomplished by the SEC's action. The $33 million fine is infinitesimal next to the $50 billion merger deal or the $5.8 billion in undisclosed bonuses. But even more conceptually problematic is that the SEC fine will be paid by the same shareholders who were the victims of the non-disclosure in the first place. So instead of an even $5.8 billion, the BofA shareholders are now out of pocket for $5,833,000,000.
At least the settlement made headlines and allowed the administration to underline its moral outrage against excessive bonus compensation.
