Word: thain
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Dates: during 2000-2009
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...John Thain's swift departure as head of Bank of America's (BofA) Merrill Lynch unit after a 15-minute dustup with his boss, CEO Ken Lewis, is a consequence of friction that occurs when conflicting business maxims come into contact. And the fact that Thain must really love...
...Thain played by that rule even though he was relatively new to Merrill, having arrived 14 months ago from the New York Stock Exchange. But he infuriated Lewis by paying out a couple of billion bucks in bonuses before the deal had closed and before disclosing to Lewis that Merrill was going to produce $15 billion in losses for the quarter. Hey, he was just taking care of his people. What's the problem...
...problem was that in doing so, Thain broke another cardinal rule: Don't surprise the boss - especially on the negative side. Lewis was reportedly apoplectic about the size of Merrill's losses in the fourth quarter. But here's a question: What were BofA's risk managers doing? When BofA did its due diligence, it certainly went over Merrill's trading book. If the losses were tied to positions that had already been taken, then shame on BofA. If Merrill's traders made bad bets in the fourth quarter, it's worth asking again, Where were BofA's risk...
...Thain's third corporate sin was awfully dumb: Never, never have a better office than your boss. On Wall Street, kitting out your office with everything from a fireplace to Renaissance art is a sport in itself. My decorator is better than yours, hence I am smarter than you. I have more swag. Thain reportedly spent a million big ones buying chintz and fancy commodes. That number is probably an exaggeration, but if you've been in bankers' offices outside New York City, you know that they are seldom visited by interior decorators. Boring is beautiful in Main Street banking...
...Thain, John • extravagant redecoration efforts of • forced departure from really nice office...