Too Big to Fail [309]
Thain was the one to have to break the news to him: Ibid.
“Jon has decided to relinquish the CEO title”: Ibid.
accumulating several hundred million dollars in stock from the IPO: After Goldman’s IPO, Thain’s 3.1 million shares were worth about $171 million. Kimberly Seals McDonald, “Goldman’s Bounty—Top Execs Will Pocket Up to $869m in IPO,” New York Post, April 13, 1999; Erica Copulsky, “Goldman Notifies Top Non-partners of Payout Formulas,” Investment Dealers Digest, May 3, 1999.
he bought a ten-acre property in Rye: Charlie Gasparino, “John Thain’s $87,000 Rug,” The Daily Beast, January 22, 2009.
determined to take a two-week trip to Vail at Christmastime: Susanne Craig and Dan Fitzpatrick, “Merrill Architects Criticized,” Wall Street Journal, January 20, 2009.
he took Thain out to dinner: Ellis, The Partnership, 660.
which he found at the New York Stock Exchange: While Thain’s NYSE appointment was confirmed on December 18, 2003, his first day was not until January 15, 2004. “Recap of Stories on NYSE Naming Goldman’s Thain As CEO,” Dow Jones, December 18, 2003.
was paid a $15 million signing bonus: Cardiff de Alejo Garcia, “Financial News: Thain to Get Up to $11M from Restricted Shares,” Dow Jones, September 16, 2008.
raised $12.8 or billion from the sovereign wealth funds: Other investors in this group include Japan’s Mizuho bank group and the Korea Investment Corp. Jed Horowitz, “Merrill Seeks Intl Investments for Itself, Clients: Pres,” Dow Jones, February 6, 2008.
He also went about slashing costs: Susanne Craig, “The Weekend That Wall Street Died,” Wall Street Journal, December 29, 2008.
flowers costing Lehman some $200,000: Ibid.
a signing bonus of $39.4 billion, even though Montag wouldn’t begin work: An SEC filing revealed that in addition to Montag’s $600,000 annual salary, Merrill agreed to pay him a bonus of $39.4 million in cash and stock-based compensation for fiscal year 2008, which he would receive in January 2009. “Merrill Lynch to Pay New EVP Montag $600,000 Salary,” Dow Jones Corporate Filings Alert, May 2, 2008.
Thain would hire Peter Kraus: Kevin Kingsbury, “Kraus the Latest Ex-Goldman Hire at Merrill,” Dow Jones, May 5, 2008; Heidi N. Moore, “Merrill’s Kraus Gets $25M, Then Leaves,” Dow Jones, December 22, 2008.
And then there was his office: Charlie Gasparino, “John Thain’s $87,000 Rug,” The Daily Beast, January 22, 2009.
angling for the Treasury Secretary post if John McCain: Louise Story and Julie Creswell, “Love Was Blind,” New York Times, February 8, 2009.
“It’s kind of ‘Raise as you go’” Fair Disclosure Wire, June 11, 2008.
Thain and O’Neal Breakfast: During breakfast between John Thain and Stan O’Neal, Thain pressed him to give him some guidance about his views on the management team. O’Neal replied, “The only person you ought to watch out for is Bob McCann.” McCann was the head of the firm’s brokerage business and the two had a long-standing mutual distrust.
Merrill’s $27 billion in CDO and subprime: In November 2007, Merrill announced that its total exposure to subprime mortgages and collateralized debt organization was $27.2 billion. UBS analyst Glenn Schorr said that hiring Thain “doesn’t change the fact that Merrill has $27 billion of CDO/subprime exposure and is likely facing further write-downs in the near term.” “Thain to the Rescue,” Investment Dealers Digest, November 19, 2007.
[O’Neal rise]: John Cassidy, “Subprime Suspect: The Rise and Fall of Wall Street’s First Black C.E.O,” New Yorker, March 31, 2008; David Rynecki, “Can Stan O’Neal Save Merrill?” Fortune, September 30, 2002.
Merrill’s beginnings, Wheaties, “Bullish on America”: “Charles Merrill, Broker, Dies, Founder of Merrill Lynch Firm,” New York Times, October 7, 1956; “Advertising: Jackpot,” Time, August 20, 1951; Joseph Nocera, “Charles Merrill,” Time, December 7, 1998; Suzanne Woolley, “A New Bull at Merrill Lynch,” Money, March 1, 2002; Helen Avery, “Merrill