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Compensation Package For Merrill Lynch CEO Revives Senate Interest In Executive Pay

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By ALISON VEKSHIN and IAN KATZ, Bloomberg News

Published: November 3, 2007

Senate Banking Committee Chairman Christopher Dodd says Merrill Lynch & Co.'s $161.5 million compensation package for former chairman and Chief Executive Officer Stan O'Neal may revive efforts in Congress to give shareholders more power to curb CEO salaries.

When O'Neal, 56, left Merrill this week, almost all of the money he took with him was in the form of securities and retirement funds promised before this year.

Still, O'Neal, who was forced out, should not be rewarded for poor performance, Dodd said Wednesday in Washington. His committee may proceed with legislation aimed at reining in excessive executive pay, Dodd added.

"There's a lot of controversy, mostly on the other side," said the Connecticut Democrat, referring to Republicans. "We'll try to get unanimity where we can. But there's a possibility we'll move on it."

A bill to give investors a nonbinding vote to protest excessive compensation was approved by the House of Representatives in April, almost four months after Home Depot's ex-CEO, Robert Nardelli, got a severance package valued at $210 million.

Merrill's board said O'Neal "retired" Tuesday, and it refused to give him a severance package after a record $8.4 billion write-down of subprime mortgages.

The U.S. Securities and Exchange Commission, responding to complaints from investors, adopted rules in July 2006 to make executive compensation more transparent to shareholders. In the Senate, Dodd will need to pick up some Republican votes to get the so-called say-on-pay bill moving again.

"I don't think it should be Congress's prerogative to get involved in the internal affairs of corporations," said Colorado Republican Wayne Allard, a member of the Senate Banking Committee. "The boards have a definite responsibility. I don't feel like the federal government ought to be stepping in."

Dodd hasn't yet called for a hearing on the legislation, introduced in April by Sen. Barack Obama, a rival of Dodd's in the race for the Democratic presidential nomination. Obama offered a bill mirroring the legislation Rep. Barney Frank pushed through the House.

Dodd is studying initiatives "that would improve shareholder rights and input in the executive compensation process," said his spokesman, Marvin Fast.

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