Charlie Gasparino Says Bank of America (BAC), Merrill Lynch Merger Not Working Out As Expected

Charlie Gasparino wrote a piece today for the The Daily Beast revealing that only a few months after Bank of America (NYSE: BAC) took over Merrill Lynch, things are not as rosy as expected.

Gasparino talked about many interesting things that may be surprising to the average spectator paying attention to the Bank of America and Merrill Lynch merger. Gasparino said that Merrill CEO, John Thain hinted that he would become the next CEO of Bank of America, assuming Ken Lewis' role.

Gasparino says if Thain was at the head of the line of succession then, he has since fallen further back.
It doesn't look good that senior Merrill executives are jetting from the firm "(McCann and Fleming resigned just last week), and tension inside the ranks grows by the day, and much of it, according to people inside Merrill, can be attributed to Thain," said Gasparino.

After Thain joined Merrill, he brought in former colleagues from Goldman Sachs (NYSE: GS), in which he paid these Goldman execs gigantic bonuses, during one of the most difficult years in Wall Street history.

Although, there were problems at Merrill before Thain arrived, many people Charlie spoke to said Thain has continued to make things worse in 2008 by downplaying Merrill’s problems and its need to raise new capital. Also, competitors seizing on the Merill turmoil and poaching top Merrill brokers.

"Inside Bank of America, senior executives tell me that Lewis is growing increasingly concerned about the management upheaval and Thain’s remarks about succession—and he isn’t happy" said Gasparino."

Another thing that rubbed people the wrong way was how Thain looked to hire execs from outside Merrill rather than internally promote employees, which is typically how employees rose through the ranks at Merrill. For example, Peter Kraus,who was hired from Goldman, began at Merrill just weeks before the Bank of America merger, and left a few weeks later, meaning he earned a $25 million bonus for about a month’s work.

On another note, people close to the situation said McCann and Fleming left the firm not because of Bank of America management, but rather, they couldn't work with Thain.

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