ex-Merrill Lynch CEO John Thain’s Indiscretion With No Shame
So John Thain resigned on Thursday, January 22, 2009 from his position as the last CEO of the failed Merril Lynch. Thain has added disgrace to an already beleaguered Bank of America which acquired Merril Lynch in 2008.
Bank of America just sucked another $20 billion out of TARP last week, to assist in “absorbing” its $20 billion acquisition of investment bankv Merrill Lynch during the height of last fall’s financial meltdown. That particular chunk of taxpayer money was on top of $25 billion already received from the initial bailout late last year. So how does the deal play out for taxpayers who footed the costs?
Drew Voros, Business editor at Mercury News writes :
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American taxpayer is now the largest shareholder in Bank of America, which Tuesday had a market capitalization of $29 billion.
Feeling good about that $45 billion investment into a bank worth $29 billion on the open market? This country’s financial recovery cannot begin until the government stops bailing out key financial companies with the same debt-laden business models employed for the last decade. Before the bears on Wall Street retreat, there needs to be a sense that the companies left standing can remain upright on their own. |
Source : Voros: Bailout saddles taxpayers with more bad debt
Voros is voicing a common opinion shared by most hard working Americans. The sentiment rings even more true amongst small business owners who are faced daily with the notion that mismanaging their business could bring them to financial ruin. Where is the government to bail out small business owners in these troubled times? The story gets even more revolting when you consider ex-Merril Lynch DEO, John Thain’s dubious actions in his final months of service.
Charlie Gasparino, at the Daily Beast writes :
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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, who is currently redesigning the White House for the Obama family for just $100,000.
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. |
Source : John Thain’s $87,000 Rug
Incredible, isn’t it ? Enough to make you sick when you think that taxpayer dollars have went to finance this arrogant man’s lavish lifestyle.
The Associated Press identified him as the best paid CEO among S&P 500 companies, raking in $83.1 million per year on salary alone. Apparently, an $83 million salary wasn’t enough to sustain Thain’s lavish lifestyle and in December 2008 he was in pursuit of a controversial $10 million bonus award from the Compensation Committee of Merrill Lynch on that company’s last day as an independent company.
American taxpayers should be furious over the fact that John Thain approved $3 to $4 billion in bonus payouts three days before Merrill Lynch swas sold to Bank of America. Thain also decided to accelerate bonus payments at Merrill Lynch, giving out somewhere between $3 billion and $4 billion of the taxpayer bailout funds to employees before the Bank of America deal closed.
Was there even a Board of Directors at Merril Lynch? What were they thinking to approve of this frivilous spending? One of the biggest problems in American business excesses is the willingness of people to go along to get along. It has virtually destroyed a once strong econmy and raped the American public with hedonistic excess.
Eric Jackson at The Street writes :
| Revelations leaking out of Bank of America in the last few days, and Thain’s departure today, alter his image — perhaps irreparably. Observers now wonder how this quiet, smart overachiever could have shown such poor judgment. |
Source: Opinion:Thain’s Undoing Was Thinking He’s Worth It
A comparison is drawn between John Thain and Dennis Kozlowski, the now-imprisoned former CEO of Tyco, who paid $6000 for a shower curtain, which makes Kozlowski appear frugal compared to Thain’s gross indiscretions.
Do these CEO’s really believe that they are worth these ridiculous personal expenditures?
