The board of Merrill Lynch (MER) is fighting with CEO John Thain over whether he should get a bonus. The board will probably win. It is the board. And, since Merrill has been sold to Bank of America (BAC), members don’t have to look Thain in the eye any more. They can take their board fees and pay for a trip to the Netherlands Antilles.

The board is wrong about Thain. He wants $10 million and he earned it.

According to The Wall Street Journal. the financial firm’s compensation committee does not want to give Thain a dime. Among other things it would look bad with all that carnage in the banking industry.

One point of view about Thain is that he surrendered Merrill into servitude without much of a fight. He could have tried to hang on like Morgan Stanley (MS) did. Thain has only been at his company for a year, and he walked into the pigsty that former CEO Stan O’Neal left behind. Merrill could have gone under like Lehman and Bear Stearns did. No one will even know.

What can be known is that Merrill sold down to under $14 when investors panicked in July. It dropped below $12 in September before Thain did his deal with B of A.  Today, Merrill shares is off 40% for the last three months. Morgan Stanley, which took outside money to stay independent, is down over 50% for the same period.

If Thain did not save Merrill as an independent company, he did save its share price for dropping close to zero and kept investors from losing billions of more dollars.

For accomplishing that, $10 million is nothing.

Douglas A. McIntyre

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