Tuesday, July 22, 2008

Merrill Lynch to cut back "private jet" usage

But first you have to lose $40 billion for shareholders, before the entrenched executives start cutting back on their perks:

Merrill Lynch has sharply cut the use of private jets among its senior managing directors by requiring them to obtain direct clearance from the global head of investment banking to hire one and to demonstrate there is no more efficient means of transport.

The new policy is part of a drive by the Wall Street bank to reduce administration and non-payroll expenses. By bearing down on these costs, Merrill aims to give itself the scope to limit lay-offs and pay better bonuses to top performers, even as the economic slowdown eats into investment banking revenues.

The restrictions on flying by private jet are also meant to demonstrate that the firm’s top brass must set an example to the rank and file in tightening belts. Other changes include requiring bankers to travel by taxi rather than limousine and reduced allowances for dinner on the job

Here's what the belt tightening is really for. They need to pay Thomas Montaq's pay package as head of global sales and trading. $39.4 million guaranteed salary and $50 million for a "hodge-podge" of other securities!

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