Among other things! Maria Bartiromo reports that in a memo to top Merrill executives last night (the ones that are left and the dearly departed), John Thain (kind of) apologized for the $1.2 million renovation to his office, and said he’d pay the bank back. According to JT, the redesign was made “during a very different world” and, BY THE WAY, wasn’t just his office but also a couple of conference rooms. Nonetheless, it was “a mistake in light of the world we live in.” Oh, and he says losses in the 4th quarter were all Stan O’Neal’s fault, and that Bank of America found out about them at the same time as Merrill. Suck it, Ken Lewis.
Full memo after the jump.
Earlier: John Thain To Get Canned For Having Fabulous Taste?
Related: Let’s Be Clear: I Am *With* These Idiots, Not *Of* These Idiots
via CNBC.com
To my Merrill Lynch colleagues:
It has been an honor to lead this company over the last very difficult year. The decisions that I made were always with the best interests of our shareholders and employees above all. I believe that the decision to sell to Bank of America was the right one for our company and our clients. While the execution has been difficult, I still believe in the strategic rationale of the transaction and I wish you all the best for the future of the combined companies.
I want to address several topics that have been inaccurately reported in the press. The first issue is our year end bonus payments. Our 2008 discretionary bonus pool was 41% lower than 2007. The size of the pool, its composition (cash and stock mix), and the timing of the payments for both the cash and stock were all determined together with Bank of America and approved by our Management Development and Compensation Committee and our Board. The total bonus pool was also substantially less than the amount allowed under our merger agreement.
The second topic is the losses in the fourth quarter, which were very large and unfortunate. However, they were incurred almost entirely on legacy positions and were due to market movements. We were completely transparent with Bank of America. They learned about these losses when we did. The acting CFO of my businesses was Bank of America’s former Chief Accounting Officer. They had daily access to our p&l, our positions and our marks. Our year end balance sheet target (which we more than met) was given to us by Bank of America’s CFO.
The final topic is the expenses related to my office. The $1.2 million reported in the press was for the renovation of my office, two conference rooms and a reception area. The expenses were incurred over a year ago in a very different environment. Nonetheless, they were a mistake in the light of the world we live in today. I will therefore reimburse the company for all of the costs incurred.
I thank all of you for your hard work and your support over the past year. I wish you all success in the future.
John
too lychen, didn’t rise
Thain continuing to school Lewis!!! Mercy rule should be in effect.
Had he not been caught, he would not be offering to reimburse. He lost his “tough, fair, honest guy” reputation he had after taking over the NYSE, and now is trying to get it back.
It is somehow sad, like grade-school stuff, to say “well, it was really Kenny who did it, and I was going to pay back that lunch money I stole anyway, and it wasn’t just for lunch, it was for snack too”.
I’ll have my eye out for that commode on Ebay.
Everybody wants to play the blame game. Thain should “out” Lewis when he talks with Maria this afternoon.
@3:
“Had he not been caught, he would not be offering to reimburse. He lost his “tough, fair, honest guy” reputation he had after taking over the NYSE, and now is trying to get it back.
”
No shit. And fair play to him; the whole trillion-dollar commode story was obviously leaked to destroy his reputation, so why not play the whole stupid press game back?
Thain’s performance has certainly not been perfect, but as ML CEO he performed what I think everyone would see as his primary duties: protecting his shareholders and his employees. If he was smarter (or at least luckier) than Ken Lewis, was that his fault?
@6: @3 here. The problem was that both he and Kenny both played the government by paying bonuses, and by paying them more in cash than stock. They were both greedy a-holes.
In my mind, were I him, I would not be going public with this. I would just quietly let a few loose-lipped people know the “real deal” and let THEM talk. Going on CNBC now is ridiculous, juvenile, and immature. It is not about protecting B of A, or MER, or helping Wall Street, the economy, or anything. It is 100% about John Thain, and that is why I have way, way more contempt for him than Lewis.
I actually (perhaps misguidedly) get the impression that Lewis really gives a sh** about B of A, and isn’t just a “caretaker”. Thain, only cares about his own rep and wasn’t in this to help the bank and thus the economy (hence, the $1.2 mil office – oh, + 2 conference rooms).
Thain is the scapegoat. He did everything in his power for Merrill shareholders and employees. Lewis was simply outsmarted by Thain and he hated it.
The office decoration issue is typical character assassination. If you could save your share holders and employees’ jobs, you deserve a million or two for whatever use you like. Not to mention the decoration was more than a year ago and no tax payers money was involved. BoA released the list of expenses for one purpose: to destroy Thain and to divert the attention from Lewis.
Lewis is the one who is ultimately responsible for diminishing BoA shareholder values. Lewis must go!
@8: Mrs. Thain! Welcome!
@8 and what about the $50m bonuses he pushed through before the deal….get a life…accept he was an idiot and not the brain child/angel he thinks he is
@6,
I agree that what Thain is doing now is about protecting Thain. Where we differ is that I have no problem with that — someone comes after you in public, I figure you’re entitled to protect yourself and/or attack them in public.
Full disclosure: I’m ex-ML (pre-Thain), although I don’t think that has any bearing on this. I expect that I’d want to smack either or both of Thain and Lewis after a few minutes together, but that’s a small part of why I’m not a CEO.
@11 You have no clue. You probably don’t even work in this industry . what “$50 m” bonus are you talking about ? Thain took zero bonus. And the bonus pool for rank and file Merrill employees is down 40% and BoA agreed to pay bonus before close of the deal. So where is the “push through” from ?
@3 — 12/6 here. I neglected to identify myself by my earlier post a couple of minutes ago. Sorry, I’m overseas and about 4 drinks into unwinding to get to sleep.
No greed on Thain’s part. He did exactly what he should have done with regard to sale and employee bonuses. BAC knew about it, but tried to mislead the press into thinking they didn’t…..ditto the losses. Only surprise was that BAC staff can’t add.
Office furniture…who cares? Care to guess what Lewis paid to spritz up his digs when he shut down the top floor a couple of years ago?
Thain will live to fight another day….Lewis is dead man walking.
@13..not for himself but for the other ml execs…and yes…i did work in the industry (not sure how that has any bearing on my opinion)
re the office: if in fact the expenses were incurred over a year ago then this is a non event. From the way it was reported, it sounded like $1.2 million in TARP money went for the renovations.
@17: cannot agree more.
What BoA has done to mislead the public is despicable.
@13: “Thain took zero bonus.”
True, but not for lack of trying, real hard, during which he revealed much about himself. Funny that the former directors of the now deceased ML don’t seem to be jumping up to defend your favorite banker…
@7: Is that you, “One Bank” singing dude? Time to do a BofA version of Eve of Destruction
@17, @18: A year ago, the economy was still in bad straits, and people laid off and bonuses cut back. And his version of “a year” could mean “last year” = 1 month ago.
@21
Does “over a year ago” mean something different to you than me?
@21:
“And his version of “a year” could mean “last year” = 1 month ago.”
You are an idiot. Period.
@23 — 22 here.
I was trying to be polite, but you have my sincere thanks for stating the obvious.
Thains daughter is hot. Any more pictures?
JT’s chief responsibility prior and up to the BOA deal was to the ML shareholders. His actions preserved shareholder value in the face of potential annihilation (see: Lehman).
BOA under Lewis’ leadership made a (or several) business decision that has lead to dilution of their shareholder’s investment.
Kenpty Lewispty (wanted to) sit on the Wall
Kenpty Lewispty had a great fall
Media leaks and restructurin’
Couldn’t put BOA back together again
25 Oh yes, the one at Duke, with the Facebook pic in a tiara, whose room was broken into..
The Thain PR machine is working hard here. Good luck. That’s a deep hole he’s dug himself and he’s not made it easy for you.
@28: Pft. I don’t have any vested interest in Thain, but Lewis’ hatchet job is blowing up in his face. 5 years from now, “banker of the year” will be a sour reminder of what was.
I say nuke Thain and Lewis from orbit. It’s the only way to be sure.
Fuckin’ A…
“They mostly come at night…mooostly.”
-Newt
I wonder if Dow Kim ever re-paid the firm for his diminutive “mini-me urinal” that was installed an inch off the floor in the men’s room on the 8th floor of Merrill’s downtown offices.
@20 – great comment. I was thinking the version of the Doors’ The End from Apocalypse Now where they chop up the (MER) bull.
aren’t Thain and Montag supposed to be “market experts”? That is what I recall from when they were hired. Thain blames “legacy positions” that he held onto for over a year since his December 1st 2007 hiring. Wasn’t his job as a market expert, and his hiring of Montag as a market expert, supposed to deal with the positions on the books? How about selling or hedging prior to a bigger blow up? These guys are quick to blame others like O’Neal and prior Merrill management for not being good risk managers but what did they do to deal with this risk for the past year? The whole thing is despicable.
aren’t Thain and Montag supposed to be “market experts”? That is what I recall from when they were hired. Thain blames “legacy positions” that he held onto for over a year since his December 1st 2007 hiring. Wasn’t his job as a market expert, and his hiring of Montag as a market expert, supposed to deal with the positions on the books? How about selling or hedging prior to a bigger blow up? These guys are quick to blame others like O’Neal and prior Merrill management for not being good risk managers but what did they do to deal with this risk for the past year? The whole thing is despicable.
@34:
What if there are no buyers in this market ? Who do you sell those sh*t to ? What if all the hedges stop working as the monolines are going out of business ? Sure, it’s always easy to blame others, just as you just did.
perhaps. but I have worked closley with Montag since he joined. he has done nothing other than blame others who have inherited the same sh#t that he did. And yet, the man has no plan, no idea and no recommendations for anything. I agree that sometimes markets break down. But you and I did not get paid almost $90mm to come in and fix it. For that price, they should do something. By the way, there is always a buyer. it is simply a matter of price. They did sell some CDOs to Lonestar for 22 cents.
Thain better keep mouth shut if he still wants to work in the industry. It looks as if he reaching for an early retirement.
@34 – spot on! Where I come from, after 3, 6, maybe 9 months (actually, you never get more than 1 quarter), those “inherited” positions are no longer inherited and are now yours. This guy should have taken responsibility for the losses as well as the commode. Shameful on every level and CNBC allows him to get away with it.
Best miss by Maria was Thain’s explanation for 4.1bn in bonuses when you lost 40bn that year – he said you “have to pay your best and brightest” to keep the franchise. I’m sorry but I don’t think there is $4.1bn of best and brightest left at that place!!!! Top 50 people split $100mm and give $4bn back to the Treasury. She needs to go to journalism school.
@34 – spot on! Where I come from, after 3, 6, maybe 9 months (actually, you never get more than 1 quarter), those “inherited” positions are no longer inherited and are now yours. This guy should have taken responsibility for the losses as well as the commode. Shameful on every level and CNBC allows him to get away with it.
Best miss by Maria was Thain’s explanation for 4.1bn in bonuses when you lost 40bn that year – he said you “have to pay your best and brightest” to keep the franchise. I’m sorry but I don’t think there is $4.1bn of best and brightest left at that place!!!! Top 50 people split $100mm and give $4bn back to the Treasury. She needs to go to journalism school.