The Wisdom Of John Thain's Job Choice

Back in late October of 2007, I wrote this post discussing whether John Thain would take the top job at Merrill Lynch, as Stan O'Neal was being cashiered. I wrote, regarding Thain,

"Why would a senior executive who has run part or all of Goldman Sachs need to prove himself running a less-robust financial services business model with less talented personnel?"

It was inconceivable to me that anyone with a record of accomplishments, as Thain had at Goldman and the NYSE, and a good job, would be remotely interested in being Merrill's CEO. To do so, it seemed to me, would be a triumph of ego over common sense.

After Thain took the Merrill job, I wrote this post, providing more detail for my reasoning that he would eventually dump the retail side and try to recreate Goldman Sachs,

"No, I think it's safe to say Thain will ditch the current form of Merrill, and build a securities sector firm with the best features, in his opinion, of Goldman, Blackstone, and other private equity/hedge fund firms.

Goldman's time is not yet finished as the premier public investment bank. Thain will do well to incorporate large parts of its culture, senior executives, and business mix at Merrill."

Given that Thain had actually jumped from a relatively secure position as NYSE CEO to head troubled Merrill, I figured that, in time, he'd spin the retail side off, realizing that it is a dying business. Instead, he'd probably recreate something with which he was familiar- the Goldman Sachs model.

Finally, in this recent post, about eleven months after the first linked post, I opined,

"Second, I bet John Thain wishes he'd stayed at the NYSE and never been tempted by the wreckage Stan O'Neal left behind. Too much damage, not enough time. Who'd have guessed that Thain would be out of a job before Vikram Pandit at Citigroup?"

Several of my friends think that Thain couldn't lose in taking the Merrill job. That, like I wrote in this post almost exactly one year ago, people like Gerstner, Ryan and Pandit 'can't lose' for taking such CEO billets.

I suppose Thain might be viewed that way, but, personally, I think Thain made a major mistake. So great that, in simply asking to be paid for doing a decent job piloting the wrecked firm into the arms of BofA, rather than go bankrupt or be seized, he drew a huge amount of scorn and derision.

Already, he is seen not as having done yeoman's work at Merrill, but, simply ended by turning greedy when he requested a $10MM bonus for his efforts.

Now he is reportedly out of the running to ever succeed Ken Lewis.

Before Merrill, Thain was viewed as a capable co-head of Goldman, and a very successful CEO at the NYSE, fundamentally changing the firm in the wake of Dick Grasso's ugly exit.

Now, Thain is also remembered for gulling investors in December and the first quarter of 2008 to put money into the disintegrating brokerage firm, then claiming they didn't need to raise any more capital. To me, Thain is tarnished by some of what he did early on at Merrill, and for even leaping into the mess. I think it smacks of too much ego and too little perspective on the unfolding disaster that was in process a year ago.

Maybe I'm alone in this view, but I think Thain's time at Merrill has diminished his reputation and raises questions about his judgment.