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John Alexander Thain (born May 26, 1955) is an American financial executive and investment banker. He was president and co-COO of Goldman Sachs, and then CEO of the New York Stock Exchange. Thain then became the last chairman and CEO of Merrill Lynch & Co. before its merger with Bank of America. He was designated to become president of global banking, securities, and wealth management at the newly combined company, but resigned on January 22, 2009. Ken Lewis, CEO of Bank of America, reportedly forced Thain to step down after several controversies, such as the losses at Merrill Lynch which proved to be far larger than previously estimated, and the award of huge executive bonuses. Thain then was chairman and CEO of the CIT Group. He has been a board member of Uber since 2017.
After leaving Goldman Sachs, Thain was CEO of the New York Stock Exchange from January 2004 to December 2007. In December 2003, interim chairman John Reed at the New York Stock Exchange told The Wall Street Journal that Thain would be paid "a plain vanilla number", about $4 million a year including bonuses, with no "strange retirement" program like the one former NYSE CEO Richard Grasso was given.
Thain arranged the sale of Merrill to Bank of America at $29 per share, a 70 percent premium over the market price. The deal valued the brokerage at $50 billion. Thain was expected to be president of global banking, securities and wealth management, a new division at Bank of America, to oversee its corporate and investment bank and most of wealth management business.
Upon joining Merrill Lynch, Thain received a $15 million signing bonus. The firm announced that Thain would receive at least $50 million a year and could be paid as much as $120 million a year, based on the company's stock price. The Associated Press identified Thain, who received $83.1 million, as one of the best paid executives of S&P 500 companies in 2007. In that year, Thain earned a total compensation of $83,785,021, which included a base salary of $750,000, a cash bonus of $15 million, stock grant of $33,013,151, and options grant of $35,017,421. CEO Compensation for John A. Thain, Equilar.com
Thain suggested to the directors that he receive a bonus in 2008 of as much as $10 million, because he "saved Merrill" by selling it off to Bank of America. After the compensation committee at Merrill refused the request, Thain reportedly dropped it on December 8, 2008.
It was revealed on January 22, 2009, that Thain spent $1.22 million of corporate funds in early 2008 to renovate two conference rooms, a reception area, and his office, spending $131,000 for area rugs, $68,000 for an antique credenza, $87,000 for guest chairs, $35,115 for a gold-plated commode on legs, and $1,100 for a wastebasket. Thain subsequently apologized for his lapse in judgment, and reimbursed the company in full for the costs.
Thain accelerated approximately $4 billion in bonus payments to employees at Merrill just prior to the close of the deal with Bank of America. Bank of America was aware of the payment, as allowing the payment to go through was reportedly one of the conditions under the merger agreement. Speculation mounted that some of TARP fund was used for the bonus payment, but TARP recipients were not required to disclose how the funds were to be segregated or for how they were to be used.
Sheila Bair, chair of the FDIC reported that during a meeting with the Treasury secretary at the depth of the financial panic, Thain asked the secretary if the TARP program would impact his compensation.The Grimmest Story You'll Hear Today about Wall Street Compensation, by Elliot Spritzer, September 27, 2012, Slate
On January 22, 2009, on CNBC's The Call, Charlie Gasparino said that Thain was going to meet Lewis later in the day. Gasparino added that Thain's future at Bank of America was in doubt, although it was not certain whether he would be leaving. Gasparino then said that Thain spent $1.22 million to refurbish his office, shortly after he had been named as CEO of Merrill in January 2008. Merrill was still an independent firm at the time, and some analysts predicted that, with Thain as new CEO, the company would be back on track for a strong performance in the midst of disappointing results on Wall Street.
The tension between Thain and Lewis had been building since mid-December and culminated on January 22, 2009, when Lewis flew to New York to meet with Thain. After a 15-minute conversation between the two men, Thain agreed to resign. Nelson Chai, Merrill's last CFO prior to its merger, was initially slated to relocate to Hong Kong to head Bank of America's Asia business. but Chai departed from Bank of America in February, just two weeks after the ouster of Thain, and was replaced by Ki-Myung Hong. Thain and Chai's departures left just one other member of Merrill's management team at the combined company, Tom Montag, as head of sales and trading.
On January 29, 2009, President Obama publicly criticized the large bonuses such as those handed out by Thain. Obama said: "I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads—that is the height of irresponsibility. It is shameful. And part of what we're going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. The American people understand that we've got a big hole that we've got to dig ourselves out of—but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up." Vice President Joe Biden also said the bonuses "offends the sensibilities. I mean, I'd like to throw these guys in the brig."
On January 27, 2009, New York Attorney General Andrew Cuomo issued a subpoena to Thain in a probe into the bonuses he received just days before the Bank of America takeover. Charges of criminal fraud can be brought under the 1921 Martin Act against a person receiving an illicit executive payout.
On October 21, 2015, CIT Group announced that Thain will retire effective March 31, 2016, and will continue as chairman. Ellen Alemany, former head of the Americas division of Royal Bank of Scotland, will replace Thain as CEO.
Thain and his wife have two daughters and two sons. Thain's property of in New York State spans three townships, Rye, Harrison, and Rye Brook. Thain has a house on North Captiva Island in south west Florida. His apartment at 740 Park Avenue was listed for sale in 2018.
Criticism of excessive compensation
On January 23, 2009, President Obama referred to Thain by saying "the reports that we’ve seen over the last couple of days about companies that have received taxpayer assistance then going out and renovating bathrooms or offices or in other ways not managing those dollars appropriately." White House press secretary Robert Gibbs also said taxpayer money shouldn't go to "line the pockets of people" who had gotten financial assistance. "The American people need to be greatly assured that their hard-earned money is not going to the bonuses or the remodeling of an office at a bank that's in trouble," Gibbs said.
CIT Group
On February 7, 2010, Reuters reported that CIT Group had announced that it was hiring Thain to replace interim CEO Peter Tobin. In 2013, CIT paid him $8.25 million.
Memberships
Thain is a member of the following organizations:
Personal life
He is active in social work and was gala co-chair for a Publicolor event in New York City that honored Rick Segal, Publicolor's former board chair.
Political contributions
In 2015, Thain contributed $205,000 to the pro-Jeb Bush Super PAC Right to Rise. The only other political contribution he made in 2015 was $5,400 to Rob Portman. In the past Thain has contributed significant amounts of money to both Democratic and Republican candidates.
External links
Categories: 1955 Births, American Chief Executives Of Financial Services Companies, American Investment Bankers, Bank Of America People, Goldman Sachs People, Directors Of Uber, Harvard Business School Alumni, Living People, Mit School Of Engineering Alumni, Merrill People, New York Stock Exchange People, People From Antioch, Illinois, Delta Upsilon Members
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