Merrill Lynch voluntarily adopted a compensation plan in 2006 that included claw-back clauses for bonuses, tying compensation for senior executives to the firm's stock price and withholding large paydays. Two years later, the company collapsed and was taken over by Bank of America. Merrill's compensation program did not prohibit employees from taking excessive risks. The situation is raising some interesting questions as Kenneth Feinberg, the pay czar for the Obama administration, seeks to rein in compensation at the seven companies that received state aid.
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