Bank Of America Fires Former Merrill Lynch CEO
It seems that Bank of America didn't really appreciate that unexpected $15.4 billion dollar 4th quarter loss by Merrill Lynch — because its former CEO, John Thain has been shown the door.
From Bloomberg:
Thain, who in September negotiated the sale of Merrill with Bank of America CEO Kenneth Lewis, “agreed his situation was not working out and that he should resign,” said Robert Stickler, a Bank of America spokesman, in an e-mail.
Bank of America has been taking a lot of heat for purchasing Merrill Lynch, a deal that forced Bank of America to ask for a "second multibillion dollar investment from the government as it absorbed the mounting losses at the New York-based investment bank," says the AP.
The Wall Street Journal is even speculating that Bank of America and Citigroup may have to be nationalized.
We wonder who'll get his fancy ass office.
Ex-Merrill Lynch CEO Thain Agrees to Leave Bank of America [Bloomberg]
What if Uncle Sam Takes Over Your Bank? [WSJ]
(Photo:wmliu)
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@Klay: No one wants his office. He was actually fired because it turned out really ugly. REALLY ugly.
Perfect timing between this post and the office expenditures post. Bravo.
I wonder what is golden parachute is? an 87,000 rug?
Welcome to America. It's early 2008 and the board wants to keep Johnny -- $1 million for a redesign, no problem. It's early 2009, $1 million for what? You're fired! (oh, and best wishes with this fantastic "package" we have for you)
BAC paid over $30B for that dog, Merrill Lynch. BAC paid over $3B for that stinking dog, Countrywide. BAC currently has a market cap value of $37B. Again, how does upper management for BAC survive such disasters? Amazing. Totally amazing.
They shouldn't nationalize anything. Just pass regulations that prevent all these banks from merging and requires any merged banks to split back up. Offer loans to keep entities afloat during the transition. This too big to fail stuff needs to be taken care of.
The only justice would be if that guy ends up in a soup kitchen line...
@Corporate_guy: Don't think for a moment that the U.S government wasn't involved in brokering this deal. They needed someone else to help burden the load of these failing institutions. That is the reason they handed out that last 20 billion so quickly.
P.S. Bear Stearns wasn't saved because it would of hurt the overall markets, but because it would of sank J.P. Morgan. That's why J.P. Morgan was the only girl at that prom.
I wish I could get fired as a CEO. $10M to lie on a beach and sip boat drinks?
How much money does he have to pay back??
By charging you USURY late fees/charges/expenses or any other word you want to call it.
Why do we HAVE to nationalize them? Private corporations SHOULD NOT be getting hand outs from the government, especially if they took a risky deal and lost money because of that. WHY IS THAT OUR CONCERN?!
Don't you all start crying for him now, I'm sure his Golden Parachute will make sure he lands softly at all the warm tropical beaches around the world.
10 bucks says some other moron bank/investment company snaps him up. He won't be unemployed for long.
Hey AP! It's not an "investment" when you take money from other people by force and throw it down an abysmal hole. It's an "investment" when you take your own money and put it toward something with value... or an abysmal hole, if you choose.
I've been hearing he resigned?
@kwsventures: keep in mind the government pushed a lot of this on them. that's why they're stuck bailing out banks now, because they pushed them into these deals
@Oranges w/ Cheese: Because if any of these insitutions collapse, you're way of life as you know it will no longer exist.
This is not your neighbor, this is our Money system. They've done a horrible job running things, but right now we have to save the system.
Imagine if you walked up on a friend, who you know is a loud mouth, getting his head kicked in by a group of three guys. You would not walk up and try and ask him "What started this?", you would stop the fight. You may know he started the fight, but he is in danger of being severely injured, and you know you have to stop it.....RIGHT NOW.
Then after he's healed, and you know he's going to live, you rip him a new one and place sanctions on your future relationship with him.
This is why we as citizens should be concerned.
Sweet Smokin Jesus......
Gee Thain, don't let that $32,000.00 door hit you in the ass on the way out.
They gave me a wheel barrel of money! It wasn't my fault!! /Krusty the Clown
One down, so very many to go. I bet he even got a severance package. "agreed his situation was not working out and that he should resign" that means he was paid to leave right?
The only "package" that guy should "receive" should be... well, I don't think I need to finish that sentence.
@Oranges w/ Cheese: if the banks go out of business, you lose everything. it's that simple. unless you live in a cave off of the food that you eat, you'll be dramatically affected. these banks bought these companies because the government pressured them to. if any of these big banks go out of business it'll have a ripple effect that'll basically put all banks out of business, which means no new growth or investment in the county.
The culture of arrogance among CEOs is going to bring down the economy. Way to go.
Tsk tsk, BofA. You've lost touch of your San Franciscan roots. Shame on you.
(Notice when the stock market crashed in '29, not one San Francisco bank failed?)
We wonder who'll get his fancy ass office.
Is that a fancy-ass office or a fancy ass-office?
Instead of a golden parachute, Thain deserves a gold-spray-painted anvil. Strapped to his back when he's tossed out the window of his newly-renovated office.
Thain wouldn't have been fired if he spent that 1.2 mil installing a wet bar, 50 in. plasma screen, kick-ass sound system, pool table, hot tub, PS3/Wii/XBox 360s and a stripper pole in his office!
@ojzitro:
I agree with the too big too fail thing. Something has to be done. I'm all for capitalism, but when a company has the nation by the balls, we need some sort of protection.
Imagine the chaos if Wal-Mart announced it was going out of business. We'd be hosed.
Boy am I glad I jumped ship with them and went to USAA
@TinkishDelight officially OVER the dc tourist infestation: I think he "officially" resigned, after Lewis basically said "resign or you're out". It's a better sounding way of getting fired.
@JGKojak: That's what gets me the most. The arrogance. Does this guy realize what he and all his brohams did on wall street? Do they see their destruction across the US and the rest of the world? They probably still pat each other on the back and live it up like everything's cool.
Former Merrill Lynch CEO John Thain agreed to resign from Bank of America ... less than a week after Bank of America was forced to seek $20 billion in government bailout money to absorb Merrill.
Merrill, meanwhile, decided to move up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America, it was reported earlier Thursday.
@downwithmonstercable: @downwithmonstercable: That way, B of A won't be on the hook for $400/week in unemployment for Thain...
@DarkKnightShyamalan: The "package" should be a bankers box to clear out his desk in 10 minutes, under the eye of an impatient security guard.
Banks are controlling the government and the nation. CEO's / wall street execs aren't ignorant. They figured out a way to get the upper hand and got a free pass over the last 8 years to put it in place.
@varro: LOL. That reminds me of the guy who put a want ad offering $50,000 to anyone that would marry his ex-wife so he didn't have to pay alimony.
So it really will be the Bank of AMERICA.
Suck it, Thain. I hope you didn't even get a chance to sit in your new office chair.
@TinkishDelight officially OVER the dc tourist infestation: A simple rule of thumb on these "resignations" is that if there is no simultaneous announcement that the executive has taken an ostensibly better job, then he/she was fired. None of these guys actually want to "focus on other opportunities" or other such nonsense.
I hate to tell you "I told you so", but when BAC bought Countrywide and Merrill Lynch, I said both deals were stupid. BAC paid way too much for both. Had BAC management waited they could have picked up both companies for next to nothing. Both were going down. Neither deserved a white knight to overpay for them. Lucky for me, I sold Countrywide at $37.02. I knew things were out of hand in that place. As for Merrill, well, I really never like that company. Therefore, I never owned that stock. It is just a matter of time before Mr. Lewis gets the ax at BAC. If the board of directors knew what they were doing, they would cut him right now.
@Corporate_guy: I like that idea. Split the bank up into a dozen pieces. Let the toxic bits fall off and die.
Shown the door.
Should have been shown a catapult on the office building roof.
"Sit here in you nice office chair..."
PULL!
Amen. This type of behavior is totally incompatible with the Bank of America ethic. Ken Lewis came up from modest means in Meridian, Mississippi. I could only imagine how ticked he was. When the MBNA merger happened a lot of their lavish furnishings were sold off. That kind of behavior is incompatible with a bank now owned by the taxpayer. Fortunately that won't be a stretch for BofA.
So who gets his remodeled office? Maybe he can keep the rugs and waste can?