More details emerge on Thain

It is worth reminding this sentence one more time:
When asked why he didn't wait until Monday to get Merrill at a lower price, Bank of America CEO Ken Lewis stated "the strategic opportunity was so compelling it couldn't wait."
All the following show how arrogant and corrupt Thain was. Hopefully this public humiliation will put an end to his career and reveal also what has been going on in the finance industry for the past many years.

Merrill Lynch CEO Thain Spent $1.22 Million On Office:
When John Thain became Merrill Lynch’sCEO 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
  • Mahogany Pedestal Table $25,713
  • 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
Thain also paid his driver $230,000 for one years work, which included the driver's $85,000 salary and bonus of $18,000, and another $128,000 in over-time pay, documents show. Drivers of top executives are often paid about half that amount.
This reckless behavior has brought BofA on the brinks of a collapse, and people are now talking about the bank as a defacto nationalized one:
Jan. 23 (Bloomberg) -- The U.S. government’s decision to pledge billions of additional dollars with strings attached to Citigroup Inc. and Bank of America Corp. may be nationalization by another name, according to former bankers and regulators.

Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.

“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”
The worst part is that a nobody like me was able to predict this whole mess since the very beginning. The good news is that even Ken Lewis job is now at stake, and he might have to resign very soon:
Jan. 23 (Bloomberg) -- Kenneth Lewis’s purchase of Merrill Lynch & Co., the deal that was supposed to cap his career as Bank of America Corp.’s master builder, may wind up derailing it.

Bank of America, the largest U.S. bank by assets, dropped 15 percent in New York trading yesterday as Lewis ousted former Merrill Chief Executive Officer John Thain three weeks after the transaction closed. The bank is worth $36.3 billion, a fraction of the more than $100 billion Lewis spent on acquisitions since he became CEO in 2001. Its quarterly dividend is a penny a share, down from 64 cents six months ago.

“This deal could cost Lewis his job eventually,” said Ralph Cole, a money manager at Ferguson Wellman Capital Management Inc. in Portland, Oregon, which sold almost 361,000 Bank of America shares in the third quarter. “They will give him more time to work this out, but everything is moving so quickly.”
Lewis began to lose confidence in Thain in December, when he learned of Merrill’s loss from members of his own merger- integration team, according to a person familiar with Lewis’s thinking. Lewis indicated that he thought Thain should have been more proactive in keeping him apprised of the results, according to this person.

Lewis was further taken aback early this month, when he learned that Merrill’s investment-banking chief, Greg Fleming, planned to leave for a teaching job at Yale University. Lewis liked Fleming, 45, a 17-year Merrill veteran, and believed Thain had helped to drive him away, the person familiar with his thinking said. Lewis also was put off by the size of bonuses paid to Merrill employees, this person said.

Another person familiar with the matter said Merrill’s loss shouldn’t have been a surprise. Lewis’s transition team at Merrill’s headquarters had access to trading results daily throughout the fourth quarter, the person said. Moreover, Bank of America executives were deeply involved in discussions about year-end bonuses for Merrill employees, according to this person.

Thain’s actions indicate he didn’t see the end coming. In December, at Merrill’s final shareholder meeting, Thain said he wouldn’t have done anything differently during his tenure at Merrill. As recently as Jan. 21, he spent $483,066 to buy 84,600 shares of Bank of America at $5.71 each, a regulatory filing showed.

The next day, at 11:30 a.m., Thain found himself face-to-face with Lewis, who had flown up from Charlotte, in his 33rd-floor office at Merrill’s headquarters in downtown Manhattan’s World Financial Center. It was the same office previously occupied by Thain’s predecessor, E. Stanley O’Neal, who resigned in October 2007 after the firm reported a then-record $2.24 billion loss.

The office had undergone a transformation. Thain spent $1.2 million early last year to redecorate, a person familiar with the matter said. The costs included $87,784 on area rugs and $18,468 on a George IV chair, CNBC reported.

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