Merrill exec to leave with big payout; others stay

NEW YORK (Reuters) - Merrill Lynch & Co's MER.N head of strategy will likely leave the bank with as much as $25 million in compensation, while three other top executives are set to stay at the firm once it combines with Bank of America Corp BAC.N, according to media reports.

The Merrill Lynch sign is pictured at the entrance of the Merrill Lynch offices in Sandton September 15, 2008. REUTERS/Siphiwe Sibeko

The Wall Street Journal reported on Tuesday that Merrill’s global strategy head, former Goldman Sachs executive Peter Kraus, will not stay on. Instead, he will pick up a paycheck worth $10 million to $25 million, the newspaper said.

Three other senior executives will be given positions at Bank of America, CNBC reported.

Greg Fleming, president and chief operating officer at Merrill, will be named head of corporate and investment banking, while Tom Montag, head of global sales and trading at Merrill, will take a similar role at Bank of America, according to CNBC.

Bob McCann, Merrill’s vice chairman and president responsible for global wealth management, will head the wealth management business at Bank of America, the network said.

A Merrill Lynch spokeswoman was not immediately available for comment.

Kraus will receive an exit payment because the takeover by Bank of America altered the terms of his contract, The Wall Street Journal reported. He will not be affected by a provision in the government’s bank rescue plan that curbs executive compensation, sources told the paper.

Merrill accepted a takeover offer from Bank of America last month. The banks originally aimed to complete the takeover in the 2008 first quarter, but they are now targeting the end of this year.

Merrill Chief Executive John Thain said on Monday that the bank needs to cut thousands of jobs because he expects a global recession next year.

Separately, CNBC reported on Tuesday that Merrill has cut about 500 sales and trading jobs across its fixed-income and equity divisions ahead of the takeover.

Reporting by Elinor Comlay; editing by John Wallace