John
Thain is giving us a tour of what is soon to become America’s most
infamous office, with its $87,000 rug, $68,000 sideboard, $28,000
curtains – all part of a $1.2m redecoration scheme. This was early
December, a little under two months before Thain would be fired in the
same room by his new boss, Ken Lewis, chief executive of Bank of
America.
For now, before a price tag had been placed on every
item in his office, the 53-year-old chief executive of Merrill Lynch
was in high spirits. The worst year on Wall Street in nearly a century
was coming to an end, and Thain could rightfully claim to have saved
his bank from ruin. Over a weekend in mid-September, as Lehman Brothers
collapsed into bankruptcy, Thain pulled off a coup: he persuaded BofA,
one of the few financial giants in the US that didn’t need government
money to survive, to pay $29 per share for his own firm, even though
Merrill was days away from following Lehman into bankruptcy.
Thain
had taken over as Merrill chief executive nine months before that
weekend deal. Now, he appeared to be one of the few Wall Street leaders
who grasped the enormity of the credit crisis. Thanks to his
analytical approach to the marketplace, it seemed, Merrill
shareholders could look forward to a stake in Bank of America. “I have
received thousands of e-mails saying, ‘Thank you for saving our
company’,” Thain told us that day. And yet he admitted that the
decision to sell Merrill Lynch – a 94-year-old institution that was
always “bullish on America” – had been painful. “This was a great job.
This was a great franchise. Emotionally, it was a huge responsibility.”
What
was his personal reaction? “You can’t live through an event like this
and not be changed,” he said. Before Merrill, Thain had gone from one
success to another. He began his career at Goldman Sachs, where he rose
swiftly through the ranks, then moved to the New York Stock Exchange,
where he repositioned an outmoded institution for global growth. He
had been hired by Merrill to save the company from the mountain of
subprime-mortgage-related assets stockpiled by his predecessor, Stan
O’Neal. But instead of saving the firm, he sold it to BofA. Or, from
another perspective, he saved the firm by selling it.
But as the
events of the next two months would show, despite what he told us that
day, Thain had not been changed by his short and tumultuous tenure at
Merrill. His 13 months at its helm and three weeks at BofA were to
expose some blind spots. He appeared to be a man in a bubble, not good
at listening to advice, and worse still at detecting changes of tone
when it came to the public’s tolerance for corporate excess. Even as he
mused with us over the highlights of the previous year, the ground
beneath him was eroding. Flashes of arrogance and misjudgment, not to
mention the insubordination of his top lieutenants from Merrill Lynch,
were becoming apparent to his new bosses at BofA – who were themselves
keenly aware that the old Masters of the Universe banking model was
done for. John Thain’s world had changed, even if he hadn’t.
A brilliant career
John
Alexander Thain was born in Antioch, Illinois, the son of a doctor. He
excelled at Antioch Community High School, captained the wrestling
team and served as the school’s valedictorian upon graduation.
The
young man with ramrod posture and a head of thick, dark hair moved east
at 18 to study electrical engineering at the Massachusetts Institute of
Technology before earning a masters in business administration at
Harvard. Upon graduation in 1979, he joined Goldman Sachs, working in
corporate finance, then investment banking. His rise at Goldman
accelerated when he was selected to help launch a mortgage-backed
securities division, reporting to Jon Corzine, who was then partner in
charge of government, mortgage and money markets trading at Goldman’s
fixed income group. By 1990, Thain had risen to treasurer at Goldman
and four years later, chief financial officer.
In 1998, as
chief executive, Corzine wanted to end Goldman’s partnership structure
and take the firm public. In the internal dispute over this and other
management issues, Thain (now presiding over the bank’s European
operations) and several senior Goldman executives ousted Corzine,
installing investment banker Hank Paulson as co-chief executive. (On
the question of going public, Thain and his co-conspirators were on the
wrong side of history: the firm’s initial public offering in 1999
enabled it to thrive over the next decade.)
Even at Goldman
Sachs, with a corporate culture of weeding out ageing partners and
promoting devotion to the firm over loyalty to individuals, Thain’s
decision to turn on Corzine shocked many of his colleagues, enhancing a
reputation for ruthlessness. A senior New York Fed official who worked
with him in 1998, on the rescue of the failed hedge fund Long-Term
Capital Management, describes Thain at that time as “a stone-cold
killer”.
In 2003, Thain left Goldman to become chief executive
of the New York Stock Exchange. His predecessor, Richard Grasso, had
been ousted following a furore over his $187m pay package, and because
he favoured maintaining the NYSE’s antiquated trading system. Thain
forced the exchange to embrace electronic trading. His biggest
achievement was to do what he’d initially resisted at Goldman and
transform the “Big Board” into a public company. Thain continued the
company’s expansion by acquiring Euronext, a pan-European exchange. It
successfully positioned the NYSE for global growth, as the results
showed: in the two years after it went public, profits rose threefold.
Seatholders at the old exchange – the owners of the 1,366 “seats” that
confer the right to trade – reaped a bonanza when those seats were
converted to shares. Taking the NYSE public also helped Thain earn some
$9m in 2006, a modest amount compared with the more than $100m he made
over his career at Goldman. But more than the money, the NYSE
experience proved that Thain could run a company on his own.
By
2007, Thain was anxious for a new challenge. It arrived seven blocks
north-west of the NYSE, at the World Financial Centre headquarters of
Merrill Lynch, where the investment bank was in the process of
imploding. Under the leadership of Stan O’Neal, Merrill had boosted its
earnings from $4.4bn in 2004 to $7.5bn in 2006 – fuelled in part by the
firm’s aggressive position in the market for securities backed by
subprime mortgages (so-called CDOs, collateralised debt obligations).
But O’Neal’s profits came in the absence of any meaningful risk
controls.
In a quest to keep boosting its income statement,
Merrill bought subprime mortgage lender First Franklin in September
2006 – at the height of the real estate bubble – for $1.3bn; in October
2007, the bank was forced to write down $8bn in losses on its dodgy
assets, wiping out nearly a year’s profits. O’Neal resigned six days
later, and the company’s board launched a hurried search for a
replacement. Among the candidates were acting co-chief executive Greg
Fleming, who headed Merrill’s investment banking operations, and Larry
Fink, chief executive of BlackRock, the massive asset management firm
49 per cent owned by Merrill. But according to a person involved in
the selection process, Alberto Cribore, the lead director at Merrill,
wanted Thain, the “Mr Fix-It” who had turned around the NYSE. The board
moved quickly, and in November 2007, Merrill announced that Thain would
become its 12th chief executive.
Mother Merrill
The
new leader didn’t come cheap. When Thain joined Merrill in December
2007, he was awarded a signing bonus of $15m and an incentive plan tied
closely to the value of Merrill shares, then worth some $68m. What
Thain did not receive upon being named chief executive was a crash
course in the art of internal company politics. Merrill Lynch is best
known in the US for being the brokerage firm that brought Wall Street
to Main Street. After the second world war, the company aggressively
courted retail investors across America, building a network of
financial advisers that was unparalleled in terms of both assets under
management and geographical reach. Although the company soon expanded
into investment banking and trading in the markets on its own account,
it remained best known for its “thundering herd” of 16,000 financial
advisers. It was also a “family friendly” firm, where sons followed in
their fathers’ footsteps and personal loyalty trumped almost every
other quality.
By 2002, when O’Neal took charge, Merrill was
over-extended. O’Neal fired thousands of employees and campaigned
against the “Mother Merrill” culture. As a result of O’Neal’s purges,
many of the firm’s “culture carriers” departed, often acrimoniously.
The talent drain was particularly apparent in 2006 and 2007, when
Merrill dug itself into a huge financial hole. The Merrill Lynch that
Thain took over in December 2007 was a shadow of its former self.
At
first, Thain made the right moves, gathering allies quickly. In
January 2008, he turned up at a conference of financial advisers in
Arizona, pressed the flesh and declared his commitment to the
thundering herd. Fleming, the head of investment banking who had
survived the O’Neal era, pledged to help Thain from the start, joining
him in an initial round of capital-raising. And Bob McCann, the
street-smart leader of the thundering herd, also rallied round the new
boss. It was hardly a holy trinity, however: Fleming and McCann
weren’t close to each other, and they both kept a watchful eye on their
new leader even while pledging loyalty.
Over time, some Merrill
executives started to complain – among themselves and to outsiders –
about a perceived arrogance in Thain. Indeed, a cult of personality had
sprung up around him during his tenure at the NYSE. Although the Big
Board is tiny compared with Merrill, it occupies a disproportionately
large share of the national attention when it comes to US financial
markets. Thain’s success there triggered reams of glowing press
reviews, including a profile in Institutional Investor magazine titled
“The Adventures of SuperThain”. The hype mattered: Thain’s status
helped him raise almost $20bn for a firm that had lost all credibility
before his arrival. But some colleagues at Merrill felt all this had
gone to his head. Shortly after arriving, Thain hired two of his
closest aides from the NYSE, chief financial officer Nelson Chai and
communications director Margaret Tutwiler. Tutwiler’s philosophy,
according to those who dealt with her, was to promote Thain as “the
public face of Merrill Lynch”. That approach grated on some
subordinates, who felt that no matter how hard they worked to turn the
firm around, all the glory would accrue to one man.
Misjudgment
In
our December interview, Thain admitted that he had underestimated the
magnitude of the problems Merrill Lynch faced. At the time he joined,
he told reporters that he didn’t plan to end the bank’s involvement in
the already troubled CDO market, despite the $8bn in write-downs on
those securities in the third quarter of 2007.
“I didn’t focus
on this when I took over,” he told us. “I didn’t know how much the
market was going to deteriorate over the course of the year.” He wasn’t
alone. Thain’s generation of Wall Street leaders had never experienced
anything akin to what lay before them in 2008.
It was only after
the Fed brokered the sale of Bear Stearns, another famed Wall Street
investment bank, to JPMorgan Chase in mid-March 2008 that Thain says he
became alarmed. And yet, even in April, discussing Merrill’s
first-quarter losses in the wake of Bear Stearns’ collapse, Thain told
analysts he was staying the course. “We’re not pulling back from our
fundamental strategy,” he said. “We’re not changing our view.”
Top
lieutenants urged him to sell as many of Merrill’s toxic assets as he
could, but colleagues remember Thain dismissing suggestions from below
with a curt, “No, we’re not going to do that”. Throughout the spring
and summer, Thain argued – internally and to investors and regulators –
that Merrill was different from Bear, that the steady stream of fees
generated by its thundering herd would protect it.
By early
summer, however, with Merrill’s share price continuing to fall, there
was no evidence of a turnaround. Despite this, Thain didn’t seem to
grasp the gravity of some of his remarks. In a conference call in June,
for example, when discussing the possibility of raising capital, he
mentioned that Merrill might sell its stakes in the Bloomberg
publishing group or BlackRock. Although he had vaguely raised such
possibilities before, in the context of the conference call the remark
came as a shock to BlackRock’s top executives, including founder Larry
Fink. Over the next few weeks, BlackRock’s share price dropped by
almost 25 per cent, enraging Fink.
By mid-July, Thain had
abandoned the idea of selling BlackRock, but Fink and some of Thain’s
top deputies had already begun to question his authority. At one
meeting, Thain would insist that the trading desk “lighten up” the
balance sheet. But a week later, no action would have been taken. Or
Thain would turn down a request to hire a high-profile investment
banker, but negotiations with the individual would still take place.
Making matters worse were Thain’s own high-profile hires. In the
spring of 2008, Merrill announced that Tom Montag and Peter Kraus
would join from Goldman Sachs. The size of the pair’s pay packages –
$39m and $29m respectively – shocked Merrill executives who were
preparing for pay cuts.
Merrill’s second quarter was a disaster,
encompassing a $9.4bn write-down and a $4.6bn loss. It was obvious that
the group would need more capital. Thain sold the bank’s investment in
Bloomberg back to New York mayor Michael Bloomberg for $4.3bn, and
accelerated an on-again, off-again plan to sell a big chunk of the
firm’s CDOs.
On July 29, Merrill announced the sale of $31bn in
CDOs to Lone Star Funds for $6.7bn. Just weeks earlier, the CDOs had
been valued at $11bn on Merrill’s balance sheet. Merrill provided 75
per cent of the financing to make the deal happen, but it seemed worth
it: with the sale, Thain had put Merrill’s problems behind him. At the
same time, the bank raised $8.5bn in new capital. It was a high-wire
act that Thain pulled off with aplomb. “The CDOs were the source of the
vast majority of losses at Merrill,” Thain told us in December. “There
was a sense of relief. We had gotten rid of our most dangerous assets
and we had raised capital.”
Turning point
The
relief was shortlived. Come September, the market turned bearish,
particularly towards Lehman Brothers, once regarded as the ultimate
survivor. Richard Fuld, Lehman’s longtime chief executive, tried to
halt the slide in his company’s stock price, announcing plans to put
all of Lehman’s bad assets into a separate bank, a feat that would have
taken months to pull off. But on the evening of Friday September 12,
after Lehman’s share price had continued to plunge, federal regulators
convened Wall Street’s top bankers at the New York Federal Reserve to
discuss the firm’s troubles. It was clear that Lehman had three stark
choices: find a partner with which to merge, hope for a bailout, or
collapse into bankruptcy.
On Saturday morning, Greg Fleming
called his boss at home at around 7am. Given Lehman’s precarious
situation, Fleming argued that Thain should start talking to BofA. The
investment banking model was changing irrevocably and BofA was the best
fit for Merrill: it was not a force in wealth management or
international investment banking. Merrill also ran the risk that BofA
might buy Lehman if Thain didn’t act. Initially, Thain was unreceptive
– he hadn’t reached one of the pinnacles of Wall Street only to cash in
his chips from a position of weakness a few months later.
Thain
arrived at the New York Fed soon after. Within an hour or two, after
New York Fed chief Timothy Geithner made it clear that Lehman wouldn’t
be rescued, Thain called BofA’s chief executive, Ken Lewis, to
initiate talks. Asked whether he was pushed to call Lewis by either
Geithner or then Treasury secretary Hank Paulson (the same Paulson he
helped install as chief executive of Goldman Sachs a decade earlier),
Thain said no. The Fed and Treasury “were initially focused on Lehman
but grew concerned about us”, Thain said. “They wanted to make sure I
was being proactive [but] they didn’t tell me to call Ken Lewis.”
For
Lewis, who had climbed to the top of the US banking industry through
acquisitions, Merrill was the ultimate prize. A deal could transform
Bank of America from the McDonald’s of the industry into a financial
services titan that would outstrip – in size, know-how and reputation –
Citigroup and JPMorgan Chase. Lewis said he’d fly to New York from the
bank’s headquarters in Charlotte, North Carolina, and the two men
would meet at BofA’s corporate apartment in the Time Warner Center at
2.30pm.
It was around lunchtime at the Federal Reserve, where
meetings continued to take place. In the early afternoon, Morgan
Stanley chief executive John Mack approached Thain. The men agreed to
talk that evening. One competitor, spotting Thain and Mack in
conversation, said that such a union would be like two drunks trying to
prop each other up. Executives at Goldman Sachs also wanted to discuss
an investment in Merrill, plus a line of credit.
That
afternoon, Thain met Lewis ready to discuss the sale of a minority
stake in Merrill Lynch. Lewis said he wanted to buy the entire company.
“I didn’t come here to sell the whole company,” Thain replied.
Yet Thain recalls that as he and Lewis talked, the strategic logic
behind a full deal became apparent. Bank of America was the dominant
retail bank in the US, flush with consumer deposits. It was also a
leader in the commercial banking business, where Merrill Lynch was
weak. Meanwhile, Merrill’s strongest unit, its 16,000 investment
advisers, would fill a gaping hole in BofA’s product offerings. Merrill
also wielded tremendous clout in the capital markets, where BofA was
just a small player.
“The logic of it made a lot of sense to both
of us,” Thain says. And yet he still didn’t like the idea of a deal.
That evening, he and his two top Goldman hires – Montag and Kraus – met
John Mack to discuss a deal with Morgan Stanley. But according to
Merrill executives, by Sunday morning, Thain had dismissed the Morgan
Stanley option.
Fleming, who was still pushing for a merger
with BofA, was holed up at the offices of Wachtell Lipton, the bank’s
law firm. He argued that BofA should move quickly to buy all of Merrill
to prevent the events of the coming week from derailing the
discussions. He pushed for a sale price in the high 20s or low 30s for
Merrill stock, a significant premium over the $17 at which the shares
had closed the previous Friday.
At the Fed that morning, Paulson
laid it on the line with Thain: Merrill’s very existence depended on
whether or not he could cut a quick deal. To more than one observer,
Thain seemed shaken by the weekend’s events. For the New York Fed
official who had described Thain as a “stone-cold killer”, the
transformation of the Merrill chief executive over the weekend was
remarkable. “He had lost his confidence,” the official said.
By
Sunday afternoon, it was apparent that BofA would offer a rich price,
$29 a share, to acquire Merrill Lynch. Selling the firm was not what
Thain had been hired to do, but at least, given the cataclysmic market
conditions, he’d got what seemed to be a good price. At 6pm, he
convened a telephone board meeting to go over the details. At 8pm, he
rode up to Wachtell Lipton’s offices, on 52nd Street and Sixth
Avenue, to sign the final agreement. A conference room was stocked
with champagne, so that at around 9pm, Thain and Lewis could toast the
deal. But both sides kept finding fresh details to iron out. When the
two chief executives finally made their toast, around midnight, much of
the bubbly was warm and flat.
On Monday September 15 2008, after
Lehman Brothers had filed for bankruptcy protection, Bank of America
announced the acquisition of Merrill Lynch in an all-stock transaction
worth $50bn. When Thain convened a “town hall” meeting that afternoon
to discuss the deal with Merrill Lynch employees, whatever misgivings
he had about the sale were assuaged by the huge round of applause that
greeted him.
Bonus time
Over
the next few weeks, as some 200 BofA employees – members of a
transition team – flocked to Merrill’s offices, Thain found himself
managing a new relationship – with Andrea Smith, the human resources
executive dispatched from BofA headquarters to serve as his shadow.
One
of the key issues in the acquisition agreement concerned the payment of
bonuses. By selling to BofA, Merrill’s executives knew that the days of
multi-million-dollar bonus payments would come to an end. As a
concession, in a non-public side-agreement, BofA allowed Merrill to pay
out bonuses of about $4bn before the deal closed. Neither Lewis nor
Thain realised that this small amendment to the contract would
eventually spark a state investigation requiring them and others to
testify under oath about what they knew about the payments and when
they knew it.
Shortly after the deal was announced, Thain made it
clear to his future employers that he expected a bonus of $40m for
putting Merrill together with BofA. That number came as a shock. In a
long conversation, BofA’s chief administrative officer, J. Steele
Alphin, urged Thain to revise the number downwards. Alphin told Thain
that BofA didn’t reward bankers simply for getting deals done, but for
creating deals that worked over time. If Thain harbored any ambitions
to succeed Lewis as chief executive of BofA, Alphin warned, a bonus of
that size would undermine him with BofA’s board.
Thain agreed,
reducing his bonus request over the course of the next two months.
Following the creation of a $700bn government bailout fund for US
banks, public disgust with multi-million-dollar bonuses and golden
parachutes was more than apparent. In November, top executives at
Goldman Sachs were the first to declare that they would not accept
bonuses for 2008, even though they made a profit for the year.
Thain
ultimately came to an understanding with Lewis that his own bonus would
be lower than that of his new boss. Presuming that the BofA chief might
get as much as $10m for his stewardship of the bank that year, Thain
calculated that he deserved a similar, but slightly smaller sum for
himself, especially for steering Merrill clear of the bankruptcy that
befell Lehman. But on the morning of December 8, the day that Merrill’s
board would meet to sign off on bonuses, the Wall Street Journal
published a story indicating that Thain was planning to ask for as much
as $10m. That afternoon, Thain recommended that neither he nor his top
executives receive bonuses for the year.
The board did agree to
$3.6bn in bonuses to be paid out to other Merrill Lynch executives. At
BofA’s request, most of the money would be paid out in cash later in
the month, before the deal closed. The early payment would actually
reduce expenses for BofA in 2009, making it easier for the bank to hit
its first-quarter numbers. Thain’s work for the year was essentially
done. On December 19, he decamped with his family to their vacation
home in Vail, Colorado, where they would spend the holidays. When the
transaction closed on January 1, Thain, the 12th and final chief
executive in Merrill’s 94-year history, was 1,700 miles away from the
company headquarters in New York.
The fall
Before
leaving for Colorado, Thain had negotiated a new title for himself:
president of global banking, securities and wealth management at BofA.
He would be responsible for planning and executing the merger of
Merrill’s banking and trading business with that of BofA. In this
portion of the deal, Merrill employees would emerge the winners, with
thousands of BofA staffers laid off and replaced by their Merrill
counterparts.
But in early January, signs of dissatisfaction
towards Thain erupted within Merrill. McCann, head of the firm’s
“thundering herd”, resigned. The news was no surprise to employees who
attended the town hall meeting in September, just after the merger was
announced. In response to a question, Thain chided McCann for leaking a
story to the press, then continued to rebuke him to such an extent that
others were embarrassed. Following that encounter, Thain declined to
promote McCann to the management level directly beneath him in the
merged company, a slap in the face.
A few days later, Fleming
tendered his resignation to accept a teaching position at Yale Law
School, his alma mater. More than McCann’s departure, Fleming’s
resignation caused concern about Thain in North Carolina. Fleming had
been the prime mover behind the BofA merger, and was well liked in
Charlotte. If Lewis had had any illusions about how some of Thain’s top
deputies felt towards their boss, those illusions vanished.
On
January 16, BofA and Merrill reported their fourth-quarter numbers.
Merrill’s were disastrous: $21bn in operating losses, the worst
performance in the bank’s history, even worse than the poor
performances of Morgan Stanley and Goldman Sachs. Still, Lewis told
listeners in a conference call that he was happy that Thain had joined
the BofA management team.
Lewis had other problems. In early
January, BofA’s share price sunk from $14 towards $10 per share.
Shortly before the earnings announcement, it emerged that Lewis had
lobbied the government in late December for an infusion of as much as
$20bn in new capital, and a guarantee for some of Merrill’s weakest
assets, in order to consummate the deal. BofA’s stock price plunged
into single digits, shareholders were outraged and several
class-action lawsuits were filed, accusing Lewis of withholding
important information prior to the December 5 vote to approve the
Merrill deal. The bank issued a carefully worded statement saying that
up until the second week of December, Merrill’s losses were in line
with expectations.
A week after the earnings announcement, the FT
published a story about early payment of the nearly $4bn in bonuses to
Merrill Lynch employees. Outraged, Andrew Cuomo, New York State’s
attorney-general, launched an investigation. Even though BofA
executives had been actively involved in the timetable and payment of
the bonuses, the bank sent a statement to the FT blaming Thain.
They
had found the opportunity they’d been looking for: Thain would take the
fall – for bonuses and for as much else as they could lump on him. The
BofA statement was a clear sign that the end was near for Thain. But in
his office on the 32nd floor, the former chief executive didn’t seem to
notice. He had just purchased 8,400 shares of his new company’s stock
and was finalising plans for a forthcoming trip to Davos for the World
Economic Forum.
Lewis flew up to New York on January 22 to fire
Thain. While he was still aboard the BofA corporate jet, the purpose of
his trip was disclosed in the media, along with the damning details of
Thain’s $1.2m office redesign. On BofA’s trading floor in New York,
where employees were angry about what the purchase of Merrill had done
to their stock, a televised image of Lewis prompted a round of boos.
Subsequently, the news that Thain was about to be fired sparked
enthusiastic applause.
And so, just before noon, with all of Wall
Street tipped off, the embattled Lewis fired the only executive in the
organisation capable of replacing him at that moment as chief
executive. It was a move designed for self-preservation in more ways
than one. Criticism of Lewis had reached deafening levels as it became
apparent that he had overpaid for Merrill. Although Fleming was the
prime negotiator on Merrill’s side of the transaction, it seemed as
though Thain had got the better of Lewis during that frenzied September
weekend.
In the wake of his firing – when Thain apologised for
the office redecoration and promised to reimburse the company – many of
his former charges unburdened themselves about his failings, real and
perceived. His supporters lashed back, blaming a venomous culture at
Merrill that never embraced Thain as its new leader.
Was Thain
the man in the bubble – brilliant at understanding the complex
technical issues surrounding turn-of-the-century banking but deaf to
the world beyond Wall Street, or even to dissenting voices in his own
ranks? And if so, was he really so different from his peers?
On
October 6, Richard Fuld testified before congressmen about the collapse
of his bank, Lehman Brothers. In what amounted to an admission of Wall
Street’s blindness towards the financial mess it created, he said: “Not
that anyone on this committee cares about this, but I wake up every
single night thinking, ‘What could I have done differently? What could
I have said? What should I have done?’ And I come back to this: at the
time I made those decisions, I made those decisions with the
information I had. I can look at you and say, this is a pain that will
stay with me the rest of my life.”
It was a speech more human
than Thain has given. But then again, Merrill did not fail. It’s also
the sort of speech the rest of Wall Street has yet to deliver – even as
it asks for billions more in taxpayer support.
Back in his office
– the office that even some of his supporters feel betrayed by – John
Thain is neither superhero nor the robotic demon he’s made out to be by
detractors. He shows us a favourite item in the room. For all the money
lavished elsewhere by his designer, this – a painting from Steven
Spielberg – cost nothing. It was a gift to commemorate Dreamworks
Animation’s initial public offering in 2004 and it depicts the ogre
Shrek alighting from a carriage with his bride, Princess Fiona. It’s
not a castle they’re bound for: the pair are about to ascend the steps
of the New York Stock Exchange.
Greg Farrell is the FT’s Wall Street correspondent. Henny Sender is chief correspondent, international finance.
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