NEW YORK (Jan. 22) – Former Merrill Lynch & Co. CEO John Thain resigned from Bank of America Corp. Thursday following news that Merrill had moved up its year-end bonuses, paying them just before BofA completed its acquisition of Merrill and sought more government bailout money.
(John Thain on left)The company gave no reason for Thain’s departure. Bank of America spokesman Scott Silvestri issued a terse statement: “(BofA Chairman and CEO) Ken Lewis flew to New York today to talk to John Thain. And it was mutually agreed that his situation was not working out and he would resign.” ( Thain also spent 1.22 million dollars to remodel his office, despite his companies heavy losses! This is as stupid as GM, Ford and Chrysler flying corporate jets to Washington looking for a handout. )
The bonuses to Merrill Lynch executives were also paid out as the company prepared to report a $15.45 billion fourth-quarter loss a loss that led Bank of America to request and receive $20 billion in government bailout money. Merrill also received bailout funds.
The bonuses raise the question of how proper it was for executives in a struggling company to be given big payments even as its soon-to-be-parent was accepting billions of dollars in government money.
“He’s just completely tone-deaf to the culture of BofA” if he was paying out bonuses days before reporting a multibillion dollar quarterly loss and as Lewis was securing more government support, Tony Plath, a finance professor at the University of North Carolina at Charlotte, said about Thain. “My surprise is the board gave him an opportunity to resign and didn’t just fire him.”