Former Merrill CEO Paying Back the Money for $1K Trash Can and $35K Commode « The Washington Independent
Former Merrill Lynch CEO John Thain apparently is having second thoughts about a fancy $1.2 million redecoration of his office, which he undertook before his firm nearly tanked and was merged with Bank of America. Thain has decided to reimburse the bank for the $1,045 trash can, the $35,115 commode, and other expenses, Reuters reports.
Thain told Merrill employees in a memo that the expenses were “a mistake in light of the world we live in today.” He also maintained in the memo that Bank of America was well aware of Merrill’s huge losses when it absorbed the bank – and he said B of A worked with Merrill to dole out that $4 billion worth of bonuses ahead of time, in December, just before the sale closed Jan. 1.
In the memo, Thain said Merrill’s fourth-quarter losses stemmed almost entirely from positions taken by his predecessor, Stanley O’Neal, who was ousted in October 2007. ”We were completely transparent with Bank of America,” Thain said. “They learned about these losses when we did.” Thain said the bonuses fell 41 percent from 2007 and their size, composition and timing “were all determined together with Bank of America.” Merrill awarded the bonuses a few days before the merger closed, much earlier than in past years.
Well, this is getting interesting. At least Thain feels some sensitivity on the spending issue, unlike, say, Citigroup and its spiffy new $50 million corporate jet.
The bonus issue, however, isn’t going to go away with finger pointing by Bank of America and Merrill. It’s the kind of thing most people can easily grasp, and get angry about. This seems to fit the pattern of bad behavior by banks lately. And yet they’ll be the loudest to complain when regulators bring down the hammer.
I’m still trying to figure out what kind of garbage bags you use with a $1,045 trash can. Where do you find the ones with the gold trim?