Extravagance has no bounds for some of the CEOs now being shown the door. Inquiring minds are looking into how Merrill Lynch CEO Thain Spent $1.22 Million On Office
When John Thain became Merrill Lynch’s CEO in early 2008, he hired Michael S. Smith Design to revamp his office suite, spending approximately $1.22 million according to documents.
* Area Rug $87,784
* Mahogany Pedestal Table $25,713
* 19th Century Credenza $68,179
* Pendant Light Furniture $19,751
* 4 Pairs of Curtains $28,091
* Pair of Guest Chairs $87,784
* George IV Chair $18,468
* 6 Wall Sconces $2,741
* Parchment Waste Can $1,405
* Roman Shade Fabric $10,967
* Roman Shades $7,315
* Coffee Table $5,852
* Commode on Legs $35,115
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.
$35,115 for a toilet on legs seems a bit pricey no matter what your tastes.
“Spending company money on a lavish redo at a time when Merrill’s finances were rocky sends the wrong message,” said Amy Borrus, deputy director at the Council of Institutional Investors in Washington. “Given the dire straits that so many financial institutions are in, redecorating the corner office should be way down on their to-do lists.”
Now Thain, a former Goldman Sachs Group Inc. and New York Stock Exchange executive who was hired to run Merrill in December 2007, joins about 35,000 employees that Lewis plans to eliminate over the next few years from the combined firms. Merrill had 58,500 employees at the end of last year, and Bank of America had 243,075.
Being ousted by Lewis “isn’t the outcome Thain wanted,” said Roy Smith, a former Goldman partner who teaches at New York University’s Stern School of Business. “He’d rather be known as someone who saved the organization than someone who salvaged a little bit of money before it went over a cliff.”
While Thain agreed to forgo a bonus for 2008, New York Attorney General Andrew Cuomo is investigating bonuses paid to Merrill executives in late December, just before the deal closed, a person familiar with the probe said. Merrill normally paid bonuses in January or February.
I hope Cuomo strikes pay dirt and Thain ends up in prison. Given that everyone will be looking for scapegoats, do not rule out this possibility.
Mike “Mish” Shedlock
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