Once the king of Wall Street, John Thain has been dethroned in more ways than one.
The former Merrill Lynch CEO responded to embarrassing accusations surrounding his hasty departure from Bank of America (Stock Quote: BAC) Monday by blaming the bank's current troubles on BofA management, his predecessor at Merrill, and the press.
Bank of America's recent acquisition of Merrill Lynch has thus far been nothing short of disastrous, with Thain having a big hand in the misery making.
Thain, who formerly held the titles of CFO at Goldman Sachs (Stock Quote: GS) and CEO of NYSE Euronext (Stock Quote: NYX) was dismissed from Bank of America last Thursday amid charges that Merrill Lynch hid fourth-quarter losses in December, accelerated employee bonuses at Merrill prior to the Jan. 1 closing of its deal with BofA, and spent lavishly to redecorate Thain's office, including the purchase of a $35,000 commode.
Tension between Thain and BofA CEO Ken Lewis reportedly had built since BofA learned in December that fourth-quarter losses at Merrill were going to be much worse than expected. Those losses almost led BofA to back out of the deal, until the federal government pledged to help to absorb the hit.
In Monday's memo addressed to Merrill employees, Thain said Merrill consulted with BofA about the bonus pool's size, composition and timing. He said that the total bonuses paid had fallen 41% from their 2007 levels. Thain also addressed Merrill's $15.31 billion fourth-quarter loss, saying the losses were incurred on "legacy positions" and that BofA had "daily access to our P&L, our positions and our marks."
The one issue where Thain did not deflect blame elsewhere was the $1.2 million he reportedly spent on upgrading his office. Thain promised to reimburse the company for the extravagant expenditures, which he called "a mistake in the light of the world we live in today."
Excuse us John, but if you pull back those $28,000 Egyptian silk curtains you just bought, you will see that today's world is quite similar to the one you inherited when you replaced Stan O'Neal at Merrill in November 2007.
Merrill's fourth-quarter 2007 pretax loss from continuing operations was $14.9 billion. Merrill Lynch's net loss for the full year 2007 was $7.8 billion, or $9.69 per diluted share, and, just like now, employees were being laid off by the boatload.
The "light of the world" has not changed. And neither have you.
Dumb-o-meter score: 100 -- Thain's commode makes Dennis Kozlowski's $6,000 shower curtain look cheap.