Boy, is this a down-market move for former Merrill CEO John Thain, both in terms of size of balance sheet and credit focus of the organization. CIT, which focuses on small and medium-sized business lending, had a roughly $70 billion balance sheet as of end of September, versus nearly $670 billion for Merrill as of year end 2008.
That $35,000 commode was more costly than Thain or his decorator could ever have imagined….
From the Wall Street Journal:
CIT is trying to mount a comeback of its own, having emerged from bankruptcy protection in December after eliminating more than $10 billion of debt.
It is one of several financial firms that have struggled to find a CEO amid the credit crisis, curbs on executive pay and the specter of government scrutiny. Now, more 16 months after the collapse of Lehman Brothers Holdings Inc., other executives prominent during the crisis are starting to surface. Thomas Russo, former general counsel at Lehman, recently became general counsel at American International Group Inc.
CIT recently approached Mr. Thain, whom Bank of America ousted shortly after its purchase of Merrill closed in January 2009. Since then, few public companies had been willing to take a risk on the executive, according to people familiar with the matter. Some CIT directors and stakeholders also raised concerns.
By all accounts, Thain was a capable executive before his career went off the rails at Merrill, and CIT is a more important organization than its size might suggest (it is a bulwark of lending to smaller enterprises). So let’s hope Thain can turn his career and the company around.