Merrill fixed-income bonuses to plummet
Payments may fall by as much as 80% for traders who specialize in mortgage bonds and CDOs
After recording a $2.24 billion third-quarter loss, Merrill Lynch & Co. Inc. told fixed-income managers to slash 2007 bonuses by an average of 40%, according to a Bloomberg report.
The New York-based financial services company said payments may fall by as much as 80% for traders who specialize in the mortgage bonds and collateralized debt obligations that recorded the largest losses, unidentified sources told Bloomberg.
Bonuses for interest-rate traders and employees in the company’s corporate bond unit may fall 20% and 60%, respectively, the sources said.
Even though Merrill will not notify employees of their bonuses until early January, managers are being told the size of bonus pools so they can decide how to allocate the money, according to people briefed on the matter.
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