Thain Pushed Over
January 25, 2009 – 5:13 pm
When the board at Merrill Lynch refused to give John Thain his cut, you knew he would get his precious bonus some other way. Recall that while Bank of America refused a line of credit for Republic Windows & Doors Company in Chicago, forcing it to suddenly shut down and sending hundreds of workers to the unemployment line, Thain was whining so loudly that he could even be heard on the battlefield. Now, Thain can be excused for being simple minded and stupid in the callous pursuit of his precious bonus, but someone on Merrill’s compensation committee was not.
Merrill Lynch Chief Executive John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered company’s compensation committee is resisting his request, The Wall Street Journal reported, citing people familiar with the situation.
The compensation committee has not reached a decision, but is leaning toward denying Mr. Thain and other senior executives bonuses for this year, The Journal said.
Merrill Lynch & Co Inc (MER.N) said on Monday that Chief Executive John Thain, who agreed to sell the brokerage to Bank of America Corp (BAC.N) earlier this year, has requested that he not receive a bonus for 2008.Thain told a board meeting Monday the decision was appropriate “given current economic and market conditions.”
When John Thain became Merrill Lynch’s CEO in early 2008, he hired Michael S. Smith Design to revamp his office suite, spending approximately $1.22 million according to documents.
Additionally, documents showed that Thain signed off on the purchases personally, and that he used another $5,000 to pay the expenses Smith incurred in doing the work.
The following is a list of the items in his suite:
- Area Rug $87,784
- 19th Century Credenza $68,179
- Pendant Light Furniture $19,751
- 4 Pairs of Curtains $28,091
- Pair of Guest Chairs $87,784
- George IV Chair $18,468
- 6 Wall Sconces $2,741
- Parchment Waste Can $1,405
- Roman Shade Fabric $10,967
- Roman Shades $7,315
- Coffee Table $5,852
- Commode on Legs $35,115
Merrill Lynch paid billions of dollars of bonuses to its employees, three days before completing its life-saving sale to Bank of America Corp (BAC.N), the Financial Times reported on its website on Wednesday.The money was paid as Merrill’s losses were mounting, forcing Bank of America Chief Executive Kenneth Lewis last month to seek additional government support for the deal. Merrill’s compensation committee agreed to pay bonuses on December 29, at least one month earlier than usual, the paper said.Yet within days of that committee meeting, the FT said, BofA officials became aware Merrill’s fourth-quarter losses would be much greater than expected.Bank of America, in a statement, told the paper, “Merrill Lynch was an independent company until Jan 1. (Merrill CEO) John Thain decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision.”
Being ousted by Lewis “isn’t the outcome Thain wanted,” said Roy Smith, a former Goldman partner who teaches at New York University’s Stern School of Business. “He’d rather be known as someone who saved the organization than someone who salvaged a little bit of money before it went over a cliff.”
Nope, got that wrong Roy! The money’s all he wanted. If Thain had managed Merrill as well as his bonus, they’d be rolling in the money.
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