The Wall Street Journal reported on Monday that Mitt Romney’s potential list of nominees for Treasury Secretary includes John Thain, the former CEO of Wall Street investment bank Merrill Lynch who now heads CIT Group. Thain is perhaps best known for overseeing Merrill Lynch as it fell apart during the 2008 financial crisis, necessitating a rescue by Bank of America, and then paying out bonuses to his failed bankers anyway.
But Thain didn’t only think his employees deserved huge bonuses for their role in the financial crash — he also believed that he should be paid $10 million during a year that saw his company lose $11 billion and get bailed out by another bank:
Merrill Lynch & Co. chief John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered securities firm’s compensation committee is resisting his request, according to people familiar with the situation. [...]
Merrill has suffered net losses of $11.67 billion this year and is about to complete its acquisition by Bank of America Corp. later this month. On Friday, shareholders of both companies separately approved the deal. Mr. Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, say people familiar with his thinking.
Bank of America required new infusions of federal aid after acquiring Merrill Lynch, as the extent of Merrill’s losses were never properly disclosed.
According to a new book by former Federal Deposit Insurance Corporation chairwoman Sheila Bair, when the CEOs of America’s major banks came to Washington to discuss the much-reviled $700 billion bank bailout in 2008, the first question asked by Thain was “if his compensation was going to be cut.” Upon Thain’s departure from Merrill Lynch, the New York Times’ Floyd Norris wrote, “The departure of John Thain from Bank of America provides another reminder of how Wall Streeters have come to see themselves as entitled to pay that would seem excessive even if their companies were not failing.”
Romney, of course, has pledged to repeal the Dodd-Frank financial reform law, which included new restraints on executive pay at financial companies.