Merrill Lynch Went Broke Before He Could Buy a Fiddle

So after reading this article about John Thain’s resignation from BofA today, I did some quick Google work to see what info was out there regarding the Andrew Cuomo’s investigation into bonuses that Merrill Lynch paid to its executives just before its sale to Bank of America. While I didn’t find anything particularly interesting on that topic, I did find an article detailing the $1.22 million Thain spent redecorating his office in early 2008.

So from the Bloomberg article we have:

Merrill had hired Thain … in late 2007 with a $15 million signing bonus. Replacing E. Stanley O’Neal as Merrill’s CEO, Thain pledged to live up to his reputation as “Mr. Fixit,” the sobriquet he earned while rescuing the NYSE.

And:

“There was a certain surprise that the Merrill losses were as steep as they were,” said James Post, a professor of corporate governance and business ethics at Boston University School of Management…

That seems like a rather ridiculous statement when the C.E.O. Merrill brought in to be their saviour spent $131,000 on area rugs. It doesn’t take much common sense to realize that if your company has $40 billion dollars tied up in failing sub-prime bonds, that your first priority should not be redecorating you private dinning room.

Then again, he is a Republican.

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Update: The Bloomberg article has been edited to mention Thain’s spending $1.22 million. I think that makes the following quote, which was included in the original article and not changed in the update, rather amusing:

“On top of that, I think Lewis didn’t think Thain was doing as much as he could to control the expenses and minimize the losses.”

Ya think?

Tags: Bank of America, John Thain, Merrill Lynch, Nero, Republican, Stupid

This entry was posted on Thursday, January 22nd, 2009 at 10:11 am and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.