Merrill Lynch CEO John Thain stands to receive $11 million from restricted stock options when the sale of his bank to Bank of America is completed, according to several reports.
Thain's total stock compensation depends on the value of Bank of America when the deal is finalized, probably in early 2009.
Thain earns an annual salary of $750,000, in addition to a $15 million signing bonus he received in December 2007. Additionally, Thain received 46,000 restricted shares when he arrived at Merrill, according to Dow Jones.
Merrill shares were trading at $17 before announcement of the sale to Bank of America, down from $56 a share when Thain was hired in 2007.
Despite the precipitous fall of Merrill shares, analysts have praised Thain for keeping Merrill Lynch afloat and quickly striking a deal with Bank of America, something Thain's counterpart at Lehman Brothers, Richard Fuld, was not able to achieve.
"Thain did the right things and succeeded in keeping that business together and maintaining a lot of value," Steven Kaplan, of University of Chicago's Graduate School of Business, told the Wall Street Journal. "It's not the outcome he would have preferred...[but] certainly it's a much better outcome than Lehman."
Analysts may be heaping praise on Thain but Merrill shareholders may have trouble mustering similar enthusiasm for the company's executive payouts, especially given Merrill's freefalling stock.
Writedowns and devalued mortgage holdings have sent Merrill's stock on a nosedive, as shares have fallen 70 percent this year.
"Investors will definitely be disappointed," Richard Bove, an analyst at Ladenburg Thalmann & Co., told Bloomberg News. "Thain's claim to fame here is that he kept them from going bankrupt."