Thain's Bonus

A bunch of investment-bank CEOs are dangling from a rising hot-air balloon. Dick Fuld, as we know, held on for too long, and by the time he finally let go, there was too far to fall, and he died. Jimmy Cayne was slightly luckier: He too held on too long, but when he finally let go, Jamie Dimon was there to help break a little bit of his fall. Cayne suffered serious injuries from which he will never really recover, but a flicker of life remains. John Mack and Lloyd Blankfein are both still holding on. And John Thain? He let go just before it was too late, suffered a few broken bones, but lives to fight on.

So the question is: Who deserves a bonus? Jim Surowiecki reckons that Thain's decision was "bonus-worthy", and implies that a $10 million bonus would not be unreasonable. But none of the others are getting a penny: not Fuld, not Cayne, not Mack, not Blankfein.

Did Thain really do a better job than Blankfein? Maybe, it's too early to tell. But he certainly looked pretty bad back in July. His subsequent decision to sell to BofA (BAC) was, in hindsight, a good one. But he doesn't need the money, and the optics are terrible. If I were him, I'd voluntarily renounce a bonus for this year, rather than ask the board for an eight-figure sum. Alternatively, if he does get that $10 million, he should immediately give it away to loyal Merrill Lynch (MER) support staff who have lost their jobs and their futures through no fault of their own.

Comments

[Armen:]

Fire him now!

2008 Dec 08 01:58 PM

[William Taylor:]

I say fire him too. The age of greedy bastards is about to be over. So he made one good decision. I bet the idea was not even his. Ten million bucks of our money. The gall!

2008 Dec 08 02:38 PM

[farmer448:]

Mr. Thain,

You have no style.

2008 Dec 08 03:39 PM

[chuck 2:]

Thain took over after they realized they were about $100 BILLION in the hole and getting deeper by the day, My shares are worth $15 instead of zip,zero,nada. (sorry bear sterns) AM I happy--no, but a lot happier than at 0. Give the man 1/2 cent a share and a kiss on the cheek.

2008 Dec 08 05:03 PM

[Malibu Mike:]

Thain is a fool. Only a self-absorbed nit-wit would have thought that this stunt had any chance of success.

When Thain joined MER one year ago, the shares were trading above $50. He received a $15 million cash signing bonus plus a mountain of potential equity to fix the mess. As a shareholder, I thought that we had paid him handsomely to make substantial improvements.

MER's current $15 a share value is courtesy of the US taxpayer. Absent the bailout, MER would be gone, along with Chuck's $15 per share. BAC shareholders would have not approved a deal that they could not possibly fund.

Ken Lewis should offload Thain. Persons with his greed level have done irreparable damage to their companies. He is only a legend in his own mind.

2008 Dec 08 07:17 PM

[1worldcurrency:]

Give him his $10 million bonus. Make him pay $15 million in taxes. Take it or leave it.

2008 Dec 09 03:07 AM