We've heard of golden parachutes. Now, we get the gilded wastebasket.
You can say you're sorry, Mr. Thain, but you can't erase your new image in the minds of millions who – until last week – probably didn't know you from Marie Antoinette. You're the guy with the $35,000 "commode on legs," an $87,000 area rug and a $1,405 wastebastket.
John Thain (above, left) was the former CEO of Merrill Lynch & Co., which Bank of America bought last September, although the deal didn't close until Jan. 1. He lasted only three weeks with BofA, and "resigned" Thursday, after it became public how many colossal PR screw-ups he had managed to squeeze into a relatively short period of time.
While Merrill Lynch was losing $15.3 billion in the fourth quarter of last year, Thain signed off on bonuses that the Financial Times has reported were $3 billion to $4 billion – paid out in December instead of January as had been the habit. To compare, the proposed stimulus package for the whole state of South Carolina is $3.2 billion.
Driving Merrill Lynch into the toilet was, in Thain's mind, a strong enough performance that he reportedly was lobbying in October for a $30 million to $40 million bonus for himself. By December he'd lowered it to a mere $5 million to 10 million – December also being the month that BofA was learning that Merrill's losses were far vaster than it had known. (No, he didn't get the bonus.)
And last week CNBC broke the news of Thain's amazing $1.2 million office makeover, which included a $35,000 "commode with legs," a 19th-century credenza for $68,000, and that "parchment waste can" for $1,405.
Today Thain said those purchases had been "a mistake in the light of the world we live in today," and he'll reimburse the company for the costs. He said the size of the bonuses had been determined "together with Bank of America." BofA noted that before Jan. 1 it had no legal standing to say yes or no to any Merrill payouts. (BofA CEO Ken Lewis -- above, right -- had previously recommended that he and his top reports not receive bonuses for 2008.)
Here's the scary part: Thain was considered a bright guy who might have been a successor to Lewis. He was CEO of the New York Stock Exchange for a time. At Goldman Sachs, he was No. 2 to Hank Paulson, who became President George W. Bush's Treasury secretary.
And the man is obviously clueless, with a blind spot the size of an $87,000 area rug, and the common sense of an armadillo trying to cross a country road with cars zipping past. He's one of Wall Street's best and brightest? Hmmmm. That may explain some things.
– Posted by Mary Newsom
More Thain reading: