Copy of John Thain's Memo, Complete With Office-Gate Apology
More News related to BAC
- Top 10 News Items 11/16-11/20: Dell Blows It Again, Geither Gets Roasted on Capitol Hill, Again, IPO's A-Plenty
- Bove Says BofA (BAC) Shareholders Want Lewis Back in CEO Spot
- Thousands of Dollars Donated to Assist Fort Hood Families in the Wake of Tragedy
- Meredith Whitney Thinks Paulson's Timing On a BofA (BAC) Double May Be Wrong
- Best of the Web 11/19: Paulson Letter, Wall Street Can't Control Itself, Ken Griffin Rebounds, $6300 Gold?
Below is a copy of the memo from former Bank of America (NYSE: BAC) executive and Merrill Lynch CEO John Thain to Merrill executives. In the memo, Thain talks about bonuses, how he was transparent with BofA about the losses and also calls his $1.2 million office renovation a "mistake" and will reimburse the company for all of the costs.
Thain caught much heat in the press and even from President Obama about the extravagant spending for his office renovation.
Copy of Memo
Sent: Sun Jan 25 22:56:11 2009
Subject:
To my Merrill Lynch colleagues
It has been an honor to lead this company over the last very difficult year. The decisions that I made were always with the best interests of our shareholders and employees above all. I believe that the decision to sell to Bank of America was the right one for our company and our clients. While the execution has been difficult, I still believe in the strategic rationale of the transaction and I wish you all the best for the future of the combined companies.
I want to address several topics that have been inaccurately reported in the press. The first issue is our year end bonus payments. Our 2008 discretionary bonus pool was 41% lower than 2007. The size of the pool, its composition (cash and stock mix), and the timing of the payments for both the cash and stock were all determined together with Bank of America and approved by our Management Development and Compensation Committee and our Board. The total bonus pool was also substantially less than the amount allowed under our merger agreement.
The second topic is the losses in the fourth quarter, which were very large and unfortunate. However, they were incurred almost entirely on legacy positions and were due to market movements. We were completely transparent with Bank of America. They learned about these losses when we did. The acting CFO of my businesses was Bank of America's former Chief Accounting Officer. They had daily access to our p&l, our positions and our marks. Our year end balance sheet target (which we more than met) was given to us by Bank of America’s CFO.
The final topic is the expenses related to my office. The $1.2 million reported in the press was for the renovation of my office, two conference rooms and a reception area. The expenses were incurred over a year ago in a very different environment Nonetheless, they were a mistake in the light of the world we live in today. I will therefore reimburse the company for all of the costs incurred.
I thank all of you for your hard work and your support over the past year. I wish you all success in the future.
John
Related Categories
Insiders' BlogStocks Mentioned
+0.01Related Entities
Comments
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
Executive Compensation
Paul A. Mandel on Jan 27, 2009 11:23 AMExcessive bonuses during good times is intolerable. Let we now forget that when Mr. Thain says he's taking the shareholders into account, this is a blatant lie. The shareholders own the company and we were taught in business 101. Those millions of dollars of profits belong to the shareholders and should be paid to them. This raises the value of the stock and compensates everyone in the company. The CEO's and Board Members work for the stockholders! Do they? Not when these old boys get into power and keep replacing themselves with their very own clones.