News of another layoff of sorts hit the streets today.
Former Merrill Lynch CEO John Thain resigned from Bank of America. John was good enough to ensure that Merrill moved up its yearend bonuses, paying them just before the Bank of America had completed its acquisition of Merrill.
Bank of America gave no reason for Thain’s departure. The company issued a terse statement: “Ken Lewis flew to New York today to talk to John Thain. And it was mutually agreed that his situation was not working out and he would resign.”
Interestingly enough, the bonuses were paid out just as the company was getting ready to report a $15.45 billion fourth-quarter loss. The U.S. Government provided bailout money to both Merrill and BoA.
To get a flavor of the quality of leadership in large financial services organizations in the United States — or perhaps John Thain was just an exception — consider the following brilliant act of financial management during tough times:
In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm, he was also spending company money on himself, senior people at the firm say.
According to documents reviewed by The Daily Beast, Thain spent $1.22 million of company money to refurbish his office at Merrill Lynch headquarters in lower Manhattan. The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith…
The other big ticket items Thain purchased include: $87,000 for an area rug in Thain’s conference room and another area rug for $44,000; a “mahogany pedestal table” for $25,000; a “19th Century Credenza” in Thain’s office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000; a “George IV Desk” for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a “Roman Shade” for $11,000; a “custom coffee table” for $16,000; something called a “commode on legs” for $35,000; a “Regency Chairs” for $24,000; “40 yards of fabric for wall panels,” for $5,000 and a “parchment waste can” for $1,400.
I wonder if the extreme makeover of his office and the accelerated bonus payout had anything to do with his sudden departure?
Well. At least he didn’t leave poor. In 2007, John Thain made the news as the highest paid CEO in the S&P 500. His income that year? A mere $83.1 million.