NEW YORK—Troubled lender CIT Group—which emerged from bankruptcy in December—named former Merrill Lynch executive John Thain as the company’s new CEO on Monday.
After a four-month search, CIT selected Thain, 54, the former Goldman Sachs president, New York Stock Exchange CEO, and most recently Merrill Lynch CEO who was ousted by Bank of America’s board after Bank of America’s controversial acquisition of Merrill at the height of the financial crisis in September 2008.
Thain’s appointment at CIT is a logical one. He is still trying to rebuild his image after a messy ouster from Bank of America as reports surfaced regarding his request for a $10 million bonus, a $1.2 million request to redecorate his Merrill Lynch office, and the additional money he sought in bonuses to pay his employees even after deep losses at Merrill.
CIT, for one, is the country’s largest lender to small-and-mid-sized business, as well as the third-largest railcar leasing and aircraft financing firm in the United States. Based in New York, CIT employs almost 5,000 people.
“Much has been accomplished in recent months to position CIT for renewed success,” Thain said in a company statement.” We will build upon this progress and work even harder to support small-and-mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs.”
CIT Director John Ryan lauded Thain as a “respected financial services executive and proven leader.”
“CIT and its customers will benefit enormously from his breadth of experience, industry acumen, and deep knowledge of the financial services sector,” Ryan said in a statement.
According to a CIT regulatory filing on Monday, Thain will have a pay package of $500,000 in salary and up to $5.5 million in stock options, a portion of which is deferred. The amount is a far cry from what he took in when he ran Merrill—more than $43 million in cash, stocks, and bonuses.
In an interview on ABC News, Thain said that CIT could repay all of its TARP obligations within the next few months.
Hounded By His Past
For now, Thain’s legacy may be defined by his failures at Merrill and the historic sale of the company to Bank of America.
New York Attorney General Andrew M. Cuomo last month filed a civil suit against Bank of America and then-CEO Kenneth D. Lewis for not disclosing severe losses at Merrill to its investors as the firm voted to take over Merrill. Bank of America has denied any wrongdoing.
During the takeover, the media publicized Thain’s request to use millions of dollars in his firm’s money to redecorate his office while Merrill stood to lose billions. He later reimbursed the company for the cost.
Some experts cautioned against hiring one of the central figures in the financial crisis to run the largest small-business lender in the country.
“It appears that CIT’s board hopes the king of bailout CEOs will enrich their shareholders with the taxpayers’ largess the same way that he did with Merrill Lynch,” University of Louisiana at Lafayette professor and bank bailout researcher Linus Wilson wrote in a column.
Thain has an engineering degree from the Massachusetts Institute of Technology and a M.B.A. from Harvard University.
After a four-month search, CIT selected Thain, 54, the former Goldman Sachs president, New York Stock Exchange CEO, and most recently Merrill Lynch CEO who was ousted by Bank of America’s board after Bank of America’s controversial acquisition of Merrill at the height of the financial crisis in September 2008.
Thain’s appointment at CIT is a logical one. He is still trying to rebuild his image after a messy ouster from Bank of America as reports surfaced regarding his request for a $10 million bonus, a $1.2 million request to redecorate his Merrill Lynch office, and the additional money he sought in bonuses to pay his employees even after deep losses at Merrill.
CIT, for one, is the country’s largest lender to small-and-mid-sized business, as well as the third-largest railcar leasing and aircraft financing firm in the United States. Based in New York, CIT employs almost 5,000 people.
“Much has been accomplished in recent months to position CIT for renewed success,” Thain said in a company statement.” We will build upon this progress and work even harder to support small-and-mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs.”
CIT Director John Ryan lauded Thain as a “respected financial services executive and proven leader.”
“CIT and its customers will benefit enormously from his breadth of experience, industry acumen, and deep knowledge of the financial services sector,” Ryan said in a statement.
According to a CIT regulatory filing on Monday, Thain will have a pay package of $500,000 in salary and up to $5.5 million in stock options, a portion of which is deferred. The amount is a far cry from what he took in when he ran Merrill—more than $43 million in cash, stocks, and bonuses.
In an interview on ABC News, Thain said that CIT could repay all of its TARP obligations within the next few months.
Hounded By His Past
For now, Thain’s legacy may be defined by his failures at Merrill and the historic sale of the company to Bank of America.
New York Attorney General Andrew M. Cuomo last month filed a civil suit against Bank of America and then-CEO Kenneth D. Lewis for not disclosing severe losses at Merrill to its investors as the firm voted to take over Merrill. Bank of America has denied any wrongdoing.
During the takeover, the media publicized Thain’s request to use millions of dollars in his firm’s money to redecorate his office while Merrill stood to lose billions. He later reimbursed the company for the cost.
Some experts cautioned against hiring one of the central figures in the financial crisis to run the largest small-business lender in the country.
“It appears that CIT’s board hopes the king of bailout CEOs will enrich their shareholders with the taxpayers’ largess the same way that he did with Merrill Lynch,” University of Louisiana at Lafayette professor and bank bailout researcher Linus Wilson wrote in a column.
Thain has an engineering degree from the Massachusetts Institute of Technology and a M.B.A. from Harvard University.
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