Bonus Outrage

Merrill’s Brazil Bet

As New York’s attorney general probes deeper into Merrill Lynch’s bonuses, more information is coming to light about the bank’s costly wager in Brazil. Its ambitious expansion into Brazil last spring—poaching 10 dealmakers there and offering them millions in guaranteed bonuses—is an example, The Wall Street Journal reports, of investment bankers costing their firm far more than they earned. Through December, Merrill’s investment bankers in Latin America cost at least $100 million in expenses while earning about $50 million. The loss may be a blip on the firm’s $27.6 billion hole in 2008, but they show how “how aggressively Merrill was willing to pay for talent as it revved up its ambitions outside the U.S., at a time when the firm was suffering from crippling trading losses,” The Journal reports.