Thomas Montag, the new head of of global sales and trading at Merrill Lynch (NYSE: MER), better be worth it. Everyone now knows about his pay package. In a government filing, documents show that he will be guaranteed $39.4 million in 2008. Beyond that Merrill is buying out his holdings in his former employer Goldman Sachs (NYSE: GS). According to The Wall Journal, "one person close to Goldman estimated that the hodgepodge of stock-based holdings is worth at least $50 million."

The numbers look big and make nice headlines, but the fact of the matter is that Montag is probably worth it. Merrill's losses have knocked it out of the top tier of brokerages in the minds of many investors. At Goldman,Montag's people made money when most peers were losing buckets. The fact that he is willing to go to MER should calm some shareholders.

The compensation is unique because Montag has this double value to Merrill. He is a gifted trader and executive. And, coming to Merrill is a sign that the firm is not toast. Montag is no idiot.

But, Merrill's problems are not behind it, so Montag probably took his money up-front.

Douglas A. McIntyre is an editor at 247wallst.com.