Merrill to give some low producers a break

Merrill Lynch & Co. Inc. is eliminating some of its “penalty box” payouts for low producers.
In July, when New York-based Merrill institutes lower payouts for brokers who haven’t met production thresholds, some brokers with six to 10 years of industry experience will get a bit of a reprieve in the form of a lower production requirement.
Brokers in this range who are annualizing between $200,000 and $300,000 were going to be hit with a 25% flat payout, but that penalty category has been eliminated. Rather, reps with six or more years of service must still produce $200,000 to avoid a 20% penalty payout, and veterans with 10 or more years must produce $300,000 to avoid a 25% penalty payout.
Another penalty-box category — a 35% payout for 10-year vets producing $300,000 to $400,000 — has been dropped.
The pay cuts will be retroactive, meaning the affected brokers will have to give back any excess pay they received so far this year. That means some of them could be taking home little or no pay beginning in July until the money is paid back, observers said.
“The pressure is so severe, they’re easing up on [the penalty box],” said a Merrill broker in the Southwest who asked not to be identified.
“An awful lot of people are in trouble” financially, he said.
Some Merrill offices and complexes have dozens of producers facing huge pay cuts, the Southwest rep added.
Dow Jones Newswires reported some of the changes in pay policy earlier today.
A Merrill Lynch spokeswoman declined to comment on the policy change.

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