If you get fired for lack of production they cant get the money back…If big client decides not to come, or big client dies, etc etc…too many things can and do happen beyond brokers control. The firms know the risk when they hire a recruit.  If they canned everyone who got a deal  these firms could raise billions.

Most contracts state that if they fire you for ‘reason’, they can come back and get the bonus.  I think one could definitely argue that lack of production is plenty of reason.  On the other hand, the advisor will argue all the reasons why the firm was the reason for their poor performance.

Wow…I never realized how hated ML FA’s were until I started reading this board. I really don’t get it. Sure there are some A holes(like everywhere) but most are hard working LOYAL to the FIRM guys just trying to do the right thing by their clients and grow a business. I’ve been there over 20yrs and it used to be a great firm. As far as the retention packages they’re safe…we’ve all signed legal binding contracts (binding us to the firm and the cash to us) if they didn’t pay there would be a battle. Everyone on this board thought we were done when BofA put that non compete language in the deal, that we were dead, but the FA’s at ML got them to drop it from the contract. I’m sure that stuff won’t appear in any other deals on the street…No Thank You Necessary… The previous writer was right, the business has always followed the ML lead…will that continue, doubtful. Too much has happened beyond the control of everyone on the board to cling to some us vs. them attitude. I don’t know about you guys but I need time to heal, this has been an astounding time in our industry. My partner and I run a good business and we’re doing whatever we have to do to hold it together…Let’s share some business ideas and good practices instead of hate posts…just a thought.

There is an article out on reuters saying retention may be delayed or renegotiated due to last weeks news.  The article says retention was reported to be 3.8 Billion.

Plus here is some, maybe, bad news for Merrill brokers

 The first chunk of that money is slated to go to some brokers Jan. 23, said one industry source, who asked not to be named.

That source pegged the total amount set aside to retain New York-based Merrill’s almost 17,000 brokers at $3.6 billion.

Selena Morris, a Merrill spokeswoman, said it was unclear whether any of the government money would be used to pay brokers’ retention bonuses. She also would not comment on the dollar amount the firm was committing to retain its advisers.

The Treasury earlier invested $15 billion of TARP money in Bank of America.

Most contracts state that if they fire you for ‘reason’, they can come back and get the bonus.  I think one could definitely argue that lack of production is plenty of reason.  On the other hand, the advisor will argue all the reasons why the firm was the reason for their poor performance.

OAS_RICH("Middle"); < marginWidth=0 marginHeight=0 ="http://ad.n2434.doubleclick.net/adi/N2434.investmentnews/B3298263;sz=300x250;click0=http://oas-central.realmedia.com/RealMedia/ads/click_lx.ads/www.investmentnews.com/article/301189968/L30/786530257/Middle/crain/INO_CSCHWAB_INST_300ROS_0109/INO_CSCHWAB_INST_300ROS_0109_300x250./7256693948456c575a624141444f6561?;ord=786530257?" Border=0 width=300 scrolling=no height=250 BORDERCOLOR="#000000"> < ='1.1' ="http://ad.n2434.doubleclick.net/adj/N2434.investmentnews/B3298263;abr=!ie;sz=300x250;click0=http://oas-central.realmedia.com/RealMedia/ads/click_lx.ads/www.investmentnews.com/article/301189968/L30/786530257/Middle/crain/INO_CSCHWAB_INST_300ROS_0109/INO_CSCHWAB_INST_300ROS_0109_300x250./7256693948456c575a624141444f6561?;ord=786530257?"> As the government injects Wall Street firms with tens of billions of dollars to keep them in business, Washington is imposing a number of restrictions on executive compensation at companies that have accepted federal funds. So far, retail brokers have escaped scrutiny over retention bonuses, an embedded perk of the retail-securities business that brokers commonly receive in order to tie them to their new firm.

The first chunk of bonus cash is slated to go to brokers Friday, said one industry source, who asked not to be identified.

That source pegged $3.6 billion as the total amount set aside to pay Merrill brokers to stay in their seats.

Selena Morris, a Merrill spokeswoman, declined to comment on the amount going to brokers.

Bank of America needed to show advisers the money, industry observers said.

"If they didn't pay out the bo-uses at this point, it would create even more attrition than if they never attempted to keep these people in the first place," said Andy Tasnady, founder of Tasnady & As-sociates LLC, a Port Washington, N.Y.-based compensation consulting firm to the brokerage industry.

It is in the government's interests not to monkey around with bonuses for brokers, said Yale Tauber, principal of New Canaan, Conn.-based Independent Compensation Committee Adviser LLC.

"The government just made itself an even more significant shareholder in BofA, and it needs to think like an investor," said Mr. Tauber, who serves as a compensation consultant for Citigroup Inc. of New York. "Why would a smart investor want to do anything that would prompt the people with the most significant books of business to leave the company?"

SAVED MONEY

"Any compensation to top executives can be deferred," he said. "But bonuses to keep your top talent in place have to be paid right now."

The details of the Merrill retention bonus plan were released in October.

Since then, some Merrill reps have been fretting that their retention bonuses may be in jeopardy.

BofA of Charlotte, N.C., wrapped up its acquisition of New York-based Merrill on Jan 1.

For months, close to 17,000 Merrill reps have sat and watched as questions about BofA's stability swirled, with some worried that the bank might not have the funding to support the full retention plan it outlined in October.

If retention bonuses for brokers had been at risk at Merrill, that could have spelled trouble for other reps at recently combined firms that also have taken federal money, brokers and observers said. 

At midnight Thursday, the Department of the Treasury and the Federal Deposit Insurance Corp. said they were investing $20 billion in BofA.

As part of the BofA bailout, the Treasury Department and the FDIC will also give protection against the possibility of losses of $118 billion in loans, securities backed by residential and commercial real estate loans and other such assets, all of which have been marked to current market value.

It appears that Merrill has been stockpiling cash to keep the best of its brokers from jumping ship.

Last week, sources said that Merrill implemented a significant restructuring in its brokerage business, one that involved shedding some of its highest-earning managers in an attempt to cut costs. The firm consolidated its four divisions into three last week and revamped its regional-coverage structure to blanket 15 different regions, down from 30.

In the process, Merrill eliminated a number of management positions "where people were earning more than $2 million or more" to oversee divisions or regions, said a source, who asked not to be identified.

The restructuring, which took place last Wednesday, could generate about $300 million in cost savings, said a source, who would not speak for attribution.

Ms. Morris confirmed the divisional and regional realignments but could not comment on any other details of the restructuring.

This is the second time in five months that Merrill's registered reps and advisers have seen their firm pulled from the potential brink. As Wall Street was collapsing in mid-September, BofA said it would buy Merrill for $50 billion.

When Treasury officials agreed to extend a second bailout to BofA last week, bringing to $45 billion the total cash the bank is now getting from the federal government, the likelihood that Merrill would make good on its retention promises in-creased greatly, observers noted.

On the surface, industry observers feel it might be a politically sensitive issue to use taxpayer money to hand out several billion dollars in bonus payments to Merrill workers. What's more, it would come on the heels of the firm's $15 billion loss for the fourth quarter.

BofA on Friday reported that it had suffered its first quarterly loss in 17 years due to escalating credit costs, write-downs of $10.47 billion and trading losses in its capital markets businesses.

Its fourth-quarter loss — of $2.39 billion, or 48 cents a share — compares with a profit of $215 million, or 5 cents a share, achieved a year earlier.

Dan Jamieson and Andrew Coen contributed to this story.

E-mail Bruce Kelly at [email protected]. E-mail Mark Bruno at [email protected].

That is more current..I can not see how they could back track on the retention at this point.  Would think that would be the end of MER if they took it back.

Mucho - if that is the case, then the big up front deals are already gone, because with that claw back clause, they look more like back end deals. If you dont make the number you dont get the money.

[quote=Sportsfreakbob]Mucho - if that is the case, then the big up front deals are already gone, because with that claw back clause, they look more like back end deals. If you dont make the number you dont get the money.
[/quote]

These firms have armies of lawyers and HR consultants that help them craft these agreements to make them ‘look’ good.  “Back end” would be the correct term to describe how these deals actually impact many advisors who accept them.  No lube.

[quote=Mucho de Tejas]

Probably one of the more ignorant comments I’ve read.  What did the brokers have to do with Merrills demise? Let’s not lose sight on the fact that a lot of brokers either weren’t offered a bonus and a lot of those that were have already left.  Did you not maake it though their trainingg program or worse yet, not get hired by ML?

"The fact that the federal government is infusing another $20 billion into Bank of America Corp. will not alter retention package plans for thousands of Merrill Lynch brokers, said a source with knowledge of the deal, who asked not to be identified.

The first chunk of bonus cash is slated to go to brokers Friday, said one industry source, who asked not to be identified.

That source pegged $3.6 billion as the total amount set aside to pay Merrill brokers to stay in their seats. "

[quote=B24]"The fact that the federal government is infusing another $20 billion into Bank of America Corp. will not alter retention package plans for thousands of Merrill Lynch brokers, said a source with knowledge of the deal, who asked not to be identified.

The first chunk of bonus cash is slated to go to brokers Friday, said one industry source, who asked not to be identified.

That source pegged $3.6 billion as the total amount set aside to pay Merrill brokers to stay in their seats. "

Do you think ML advisors get another retention bonus if they are spun off from BAC in 12-24 months?   Aren’t the AGE and Prudential people all hoping to double and triple dip on the WFC deal?

[quote=Sellout21]Do you think ML advisors get another retention bonus if they are spun off from BAC in 12-24 months?   Aren’t the AGE and Prudential people all hoping to double and triple dip on the WFC deal? [/quote]

The guys who jumped from ML to UBS or went Indy are looking smart now.

Does anyone else think it would make more sense to base these deals on team production rather than individual production?

The retention packages where paid in full today and hit your CMA account this afternoon.

How bad would it feel to be locked into a seven year contract with BAC?