Former Merrill CEO Thain Resigns from Bank of America

By: 13 News
By: 13 News
The top Merrill Lynch exec is under fire for spending $1.2 million on remodeling his office.

**FILE ** In this Jan. 26, 2008 file photo, Chief Executive Officer of Merrill Lynch, USA, John Thain speaks during a working session at the World Economic Forum in Davos, Switzerland. (AP Photo/Michel Euler, fi e)

NEW YORK - Former Merrill Lynch chief executive John Thain has resigned from Bank of America, effective immediately.

Earlier, Bank of America’s shares fell sharply after a report that executives are meeting to discuss Thain’s future with the company.

The report followed news that Merrill, which was about to report a $15.45 billion fourth-quarter loss, decided to move up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America on Jan. 1.

Bank of America’s chief executive, Ken Lewis, met with executives Thursday to discuss Thain’s future. Thain spent $1.22 million redesigning his office — including $35,115 for a "commode on legs" — when he became CEO of Merrill Lynch a year ago. Thain also paid his driver $230,000 for one years work, which included the driver's $85,000 salary and bonus of $18,000, and another $128,000 in over-time pay, documents show. Drivers of top executives are often paid about half that amount.

Such expenses would have followed $12.2 billion of net losses at Merrill in the second half of 2007 as writedowns on mortgages and other toxic debt began to mount. Thain became chief executive in December 2007.

The outlays recall heavy spending on personal items by senior executives at other companies, including a $6,000 shower curtain owned by former Tyco International Ltd chief Dennis Kozlowski, and an office fish tank acquired by former Citigroup Inc executive Todd Thomson.

Bank of America has increasingly come under criticism in recent weeks for its acquisition of Merrill Lynch. The deal 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.

On Thursday, Bank of America said it knew of Merrill’s plans to move up the bonuses.


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