Media Creaming Pants Harder Than Ever For Hunky (Available!) Merrill Lynch Guy
Ha ha ha just months ago the stupid business press were writing glowing cover stories of Merrill Lynch CEO John Thain like he was John McCain in 2000 and now look his company doesn't exist anymore! Yes we've received those tips. "Aside from its obvious troubles-afflicting all the largest financial institutions," Forbes wrote, "Merrill is in damn good shape." Interesting word choice, media! Distracted by a certain someone's athletic physique?Oh but wait, everyone still hearts John Thain. He was not a giant arrogant prick, managed to understand all those complex securities without being autistic, and he looks go good next to that other guy! By which I mean Lehman CEO Dick Fuld, but also Thain's his predecessor at Merrill, and his predecessor before that from the New York Stock Exchange, and pretty much any other asshole by whom you could be being laid off right now. From today's Journal:
Management specialists said the two men seemed to serve as contrasting case studies in what to do — and not to do. "Thain did the right things and succeeded in keeping that business together and maintaining a lot of value," says Steven Kaplan, professor at the University of Chicago's Graduate School of Business. "It's not the outcome he would have preferred...[but] certainly it's a much better outcome than Lehman." Experts were impressed with the speed with which Mr. Thain engineered Merrill's sale; the deal was worked out within two days.
Unlike Mr. Fuld, who had run Lehman since 1993 and is the architect of the modern Lehman, Mr. Thain had been at Merrill Lynch just since December, when he was brought in to stanch the bleeding. He didn't have the same pride of ownership in Merrill that Mr. Fuld had in Lehman. That is why he was willing to sell $31 billion worth of mortgage-backed derivatives for 22 cents on the dollar in late July - far lower than many firms had been pricing those securities. And that is also why, seeing what had happened to Bear Stearns, Fannie and Freddie, and Lehman Brothers, he took the pre-emptive step of selling Merrill Lynch to Bank of America. In the process, he got $50 billion for Merrill's shareholders. True, that was half of what Merrill was worth a year ago, and a once-proud name is about to be swallowed up by a commercial bank. But he also got $50 billion more than Mr. Fuld got for his shareholders - and being sold is a lot better than being liquidated.
And Merrill's Denver employees aren't even getting laid off! So are Thain and his two Goldman buddies worth the $200 million they'll be getting for their year at Merrill Lynch? Oh hell yes, say the shareholders who paid a half billion for fifteen years of Dick Fuld! And who are we to disagree? But wait, is there really a reason we can't raise the tax rate to 95% on all annual income higher than, say, $10 million? Seriously, we read all those fawning profiles; John Thain is totally the type of guy who would do it all over again for two million. John Thain Keeps His Cool, Continues To Be Hot [NY Mag]