Pigs: n. also called hogs or swine, are a genus of even-toed ungulates. Pigs are omnivores and have been known to eat any kind of food, including dead insects, tree bark, garbage, and even other pigs. (They’re also smart and sociable, but that doesn’t fit my current pig model…)
At the beginning of December I wrote about the greedy head of Merrill Lynch, John Thain (and one of John McCain’s major fundraisers…) He wanted a $10 million bonus after ML had just lost $11 billion – (actually twice that much – see below).
Well, Thain’s back in the news.
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
[Between $3 and 4 BILLION in bonuses, actually!]
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal….
John Thain (Merrill’s chief executive) decided to pay year-end incentives in December as opposed to their normal date in late January.
Thain evidently accelerated the executive payouts before it was revealed that Merrill had suffered a $21.5bn operating loss in the fourth quarter.
After the merger with BofA, Thain joined their staff (for 3 weeks), but now he’s out on his curly little tail:
John A. Thain, the former chief executive of Merrill Lynch, resigned from Bank of America on Thursday after the bank suffered unexpected losses stemming from its acquisition of the giant brokerage.
Mr. Thain tendered his resignation Thursday morning after a 15-minute meeting with Kenneth D. Lewis, the chief executive of Bank of America. …
The relationship between the two men soured over the last month as Mr. Lewis grew increasingly frustrated, believing that Mr. Thain did not have a good grasp of the firm’s operations, according to an individual who is aware of the tensions between the two men but who does not have authorization to speak publicly. Mr. Thain had been put in charge of the bank’s trading, investment banking and brokerage operations after Bank of America acquired Merrill Lynch in January.
The final straw for Mr. Lewis may have been the decision by Mr. Thain to make an earlier-than-usual bonus payout to Merrill employees, just three days before the merger closed on Jan. 1.
And from whence did the funds for the bonuses come? TARP (you and me).
Update: Fantastic roundup of Thain’s Greatest Hits on TPMMuckraker today. Number 1?
The Great Redecoration
Thain pays $1.2 million last year — well after Merrill’s huge losses on mortgage assets are known — to refurbish his office suite. That includes $800,000 to interior designer Michael S. Smith, who’s also redecorating the White House for the Obama family. (More Smith clients: Steven Spielberg, Michelle Pfieffer, and Cindy Crawford.)
Other expenses from the big redecorating project, all signed off on by Thain personally:
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
At this time, reports CNBC’s Charlie Gasparino on The Daily Beast, Thain is “preaching the virtues of cost control, telling employees to reduce expenses including car services, entertainment and travel”.