John Thain
John Alexander Thain (born May 26, 1955) is an American businessman, investment banker, and former chair and CEO of the CIT Group. Thain was the last chairman and chief executive officer of Merrill Lynch before its merger with Bank of America. He was designated to become president of global banking, securities, and wealth management at the newly combined company, but resigned on January 22, 2009. Ken Lewis, CEO of Bank of America, reportedly forced Thain to step down after several controversies, such as the losses at Merrill Lynch which proved to be far larger than previously estimated, and  the award of huge executive bonuses. He is currently a board member of Uber appointed by former Uber chief executive officer Travis Kalanick on September 29, 2017. Background. Thain was born in Antioch, Illinois. His father, Alan, was a doctor on the town's redbrick Main Street who has since handed his practice on to Thain's two brothers, Dennis and Robert, both general practitioners. He earned a bachelor's degree in electrical engineering from MIT in 1977 and an MBA from Harvard Business School in 1979. While attending MIT, Thain joined the Delta Upsilon fraternity. Career. Before he came  to Merrill, Thain had been the CEO of the New York Stock Exchange from January 2004 to December 2007. He also worked at Goldman Sachs, as head of its mortgage securities division from 1985 to 1990, and president and co-chief operating officer from 1999 to 2004. Thain reportedly was one of the runners-up to head Citigroup. Merrill Lynch and Citigroup sought new leaders following the sudden departure of their former CEOs after the disappointing performance in the third quarter of 2007 due to the subprime mortgage crisis. Thain arranged the sale of Merrill to Bank of America at  $29 per share, a 70 percent premium over the market price. The deal valued the brokerage at $50 billion. Thain was expected to be president of global banking, securities and wealth management, a new division at Bank of America, to oversee its corporate and investment bank and most of wealth management business. Compensation. In December 2003, interim chairman John Reed at the New York Stock Exchange told "The Wall Street Journal" that Thain would be paid "a plain vanilla number", about $4 million a year including bonus, with no "strange retirement" program like the one former NYSE  CEO Dick Grasso was given. Upon joining Merrill Lynch, Thain received a $15 million signing bonus. The firm announced that Thain would receive at least $50 million a year and could be paid as much as $120 million a year, based on the company's stock price. The Associated Press identified Thain, who received $83.1 million, as one of the best paid executives of S&P 500 companies in 2007. In that year, Thain earned a total compensation of $83,785,021, which included a base salary of $750,000, a cash bonus of $15,000,000, stock grant  of $33,013,151, and options grant of $35,017,421. Thain suggested to the directors that he receive a bonus in 2008 of as much as $10 million, because he "saved Merrill" by selling it off to Bank of America. After the compensation committee at Merrill refused the request, Thain reportedly dropped it on December 8, 2008. It was revealed on January 22, 2009 that Thain spent $1.22 million of corporate funds in early 2008 to renovate two conference rooms, a reception area, and his office, spending $131,000 for area rugs, $68,000 for an antique credenza, $ 87,000 for guest chairs, $35,115 for a gold-plated commode on legs, and $1,100 for a wastebasket. Thain subsequently apologized for his lapse in judgment, and reimbursed the company in full for the costs. Thain accelerated approximately $4 billion in bonus payments to employees at Merrill just prior to the close of the deal with Bank of America. Bank of America was aware of the payment, as allowing the payment to go through was reportedly one of the conditions under the merger agreement. Speculation mounted that some of TARP fund was used for the bonus payment, but  TARP recipients are yet to disclose how the funds were segregated, or what they were used for. Sheila Bair, chair of the Federal Deposit Insurance Corporation reported that during a meeting with the Treasury secretary at the depth of the financial panic, Thain asked the secretary if the TARP program would impact his compensation. Departure from Bank of America. On January 16, 2009, Bank of America announced that Merrill suffered an unexpected loss of $15 billion for the fourth quarter of 2008. Bank of America CEO Ken Lewis said that, without $138 billion in government assistance, including the  infusion of $20 billion from the federal government, he would have pulled out of the Merrill deal, which had been approved by Bank of America shareholders in early December. People close to Lewis say his relationship with Thain was strained by Merrill's massive fourth quarter loss. Lewis himself faced criticism for rushing to buy Merrill for $28 billion after less than two days of due diligence. On January 22, 2009, on CNBC's "The Call", Charlie Gasparino said that Thain was going to meet Lewis later in the day. Gasparino added that Thain's future at Bank  of America was in doubt, although it was not certain whether he would be leaving. Gasparino then said that Thain spent $1.22 million to refurbish his office, shortly after he had been named as CEO of Merrill in January 2008. Merrill was still an independent firm at the time, and some analysts predicted that, with Thain as new CEO, the company would be back on track for a strong performance in the midst of disappointing results on Wall Street. The tension between Thain and Lewis had been building since mid-December and culminated on January 22, 2009 when Lewis  flew to New York to meet with Thain. After a 15-minute conversation between the two men, Thain agreed to resign. Criticism of excessive compensation. On January 23, 2009, President Obama referred to John Thain by saying "the reports that we’ve seen over the last couple of days about companies that have received taxpayer assistance then going out and renovating bathrooms or offices or in other ways not managing those dollars appropriately." Obama's press secretary Robert Gibbs also said taxpayer money shouldn't go to "line the pockets of people" who've gotten financial assistance. "The American people  need to be greatly assured that their hard-earned money is not going to the bonuses or the remodeling of an office at a bank that's in trouble," Gibbs said. On January 29, 2009, President Obama publicly criticized the large bonuses such as those handed out by Thain. Obama said: "I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult  position that if they don't provide help that the entire system could come down on top of our heads—that is the height of irresponsibility. It is shameful. And part of what we're going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. The American people understand that we've got a big hole that we've got to dig ourselves out of—but they don't like the idea that people are digging a bigger hole even as they 're being asked to fill it up." Vice President Joe Biden also said the bonuses "offends the sensibilities. I mean, I'd like to throw these guys in the brig." Criminal investigation. On January 27, 2009, New York Attorney General Andrew Cuomo issued a subpoena to Thain in a probe into the bonuses he received just days before the Bank of America takeover. Charges of criminal fraud can be brought under the 1921 Martin Act against a person receiving an illicit executive payout. Post-Merrill career. On the evening of February 7, 2010, Reuters reported that CIT Group had announced  that it was hiring Thain to replace interim CEO Peter Tobin immediately. In 2013, CIT paid him $8.25 million. On October 21, 2015 CIT Group announced that chief executive officer John A. Thain will retire effective March 31, 2016, and will continue to serve as chairman of the board of directors. Ellen R. Alemany, former head of the Americas division of Royal Bank of Scotland, will replace Thain as CEO. Memberships. Thain is a member of the following organizations: Personal life. He is active in social work and served as gala co-chair for a Publicolor event in New  York City that honored Rick Segal, Publicolor's former board chair. Thain and his wife have two daughters and two sons. Thain's property of in New York state spans three townships, Rye, Harrison, and Rye Brook. Thain has a house on North Captiva Island in south west Florida. Political contributions. In 2015, Thain contributed $205,000 to the pro-Jeb Bush Super PAC Right to Rise. The only other political contribution he made in 2015 was $5,400 to Rob Portman. In the past Thain has contributed significant amounts of money to both Democratic and Republican candidates. John Thain