John A. Thain, the new chief executive of Merrill Lynch, is set to receive an initial pay package of nearly $50 million as he embarks on a quest to restore the firm's reputation and risk management practices after a devastating few quarters of subprime and credit losses. The pay package is largely composed of stock and options that could be worth more than $120 million if MER stock rises more than $40 a share in the next two years. The pay, disclosed in a regulatory filing today, will make the executive one of the highest paid on Wall Street. It is also three times what he earned over his first three years running the New York Stock Exchange and may approach the pay level of hedge fund traders and top executives at Goldman Sachs, where Thain previously worked.

Verizon Communications agreed to put the company’s compensation plans to an annual vote by investors beginning in 2009 after shareholders pressured the company over executive compensation. The decision came after over 50% of shareholders came out in support of a “say on pay” proposal suggested by BellTel Retirees. The vote will give shareholders the right to cast a non-binding vote that will serve as guidance for the company’s board to make compensation decisions.

C. William Jones, executive director of BellTel Retirees, said he was pleased with the board’s decision but somewhat puzzled as to why they are delaying it till the 2009 meeting. Executive compensation has rocketed in recent years with Verizon’s CEO netting $20 million – an 11% increase over 2005.

Aflac's board of directors agreed to move up the adoption of the "say on pay" proposals to 2008. This new proposal would give shareholders the right to cast a non-binding advisory vote on the company's pay-for-performance compensation of the top five named executive officers. Aflac was the first US company to adopt such a resolution but it was not scheduled to be put into practice until 2009.

"We believe that our shareholders have embraced the expanded disclosure on executive compensation and it gives them the information they need to make an informed decision as they weigh pay versus performance," said Dan Amos, Aflac chairman and CEO. "Aflac has a long history of generating strong returns for its shareholders and we remain committed to being transparent and responsive to our owners."

Micron Technology (NYSE:MU) chief executive Steven Appleton received $8.6 million in fiscal 2007, according to a proxy statement filed today. Appleton took hom $948,169 in base salary and restricted stock worth $7.6 million on the days that they were awarded. The executive also took home $63,157 in other compensation including 401k contributions and payment for unused time off. Is this pay justified? Well, last month the company reported a fiscal and full year loss after a profitable 2006. The company posted a loss of $320 million down from a profit of $408 million last year. Apparently not.

Dell chief Michael Dell took home just $4.5 million during his first year behind the wheel of Dell since he gave up control. The returning CEO failed to qualify for a raise or any incentive bonuses in addition to his $950,000 in salary, company-paid security, and option awards. Michael Dell also saw his $6.6 billion in company stock slide a little more over the past year before rebounding slightly in recent months. It is worth noting that Dell's compensation is substantially less than the $8.5 million paid to former CEO Kevin Rollins during the 2007 fiscal year. But then again, how much does a man really need to live on?

Executive compensation in the UK is quickly closing the gap with the USA, according to a new report by the FSA. The study found that total earnings by chief executives at British blue-chip companies have doubled over the past five years. Another study conducted at the University of Pennsylvania showed that US CEOs' average pay was 1.6 times that of their UK counterparts in 2003, down from 2.2 times six years ealier. Some are blaming compensation consultants for these mishaps as those are the ones that help align CEO incentives with shareholder interests. Others suggest that the government should impose regulatory caps, but history has shown that government intervention creates many more problems than it solves.

Merrill Lynch & Co. chief executive E. Stanley O'Neal announced his retirement today following a three day drama surrounding his future after the firm announced a nearly $8 billion writedown in the value of its securities as a result of subprime and credit markets. The ex-CEO also angered board members when he approached Wachovia Corp about a possible merger without board authorization.

"We would like to thank Stan for the contribution he has made leading a major transformation of Merrill Lynch into a global and diversified company with enormous potential ahead of it," Cribiore said in a statement. "His commitment to the company, its clients, shareholders and employees has never wavered and the company will reap tremendous benefits in the future from his work."

Alberto Cribiore has been appointed as interim chairman and will also chair a committee that will evaluate other CEO candidates. Merrill presidents and COOs Ahmass Fakahany and Gregory Fleming will run the company while a search is conducted. And with a possible $4 billion in additional writedowns, they may have their work cut out for them.

The decision to oust Merrill Chief Executive Stan O'Neal could cost the company millions. A regulatory filing shows that a combination of his company holdings, retirement benefits and a severance package could cost upwards of $200 million. Problematically, the compensation committee is filled with O'Neal allies, including Chubb CEO John Finnegan, who is a former colleague from their days at GM and Alberto Cribiore who has been a strong supporter of O'Neal. So, while the company does not have a non-takeover severance package in place by default the compensation committee will likely grant one. The executives dismissal comes after a record $8.4 billion quarterly writedown that came as the result of risky subprime lending and CDO trading.