On John A. Thain’s first day running Merrill Lynch & Co. last year, he pledged to live up to his reputation as “Mr. Fixit,” a nickname earned during his prior job rescuing the New York Stock Exchange.
“We do have a few problems, but they’re in a very isolated set of areas,” Thain said on Dec. 3, 2007, addressing employees on the New York-based firm’s bond-trading floor. “We can fix those problems.”
Thain, hired with a $15 million signing bonus to replace E. Stanley O’Neal as chief executive officer, held on to more than $40 billion of subprime-tainted bonds as the market cratered. He agreed to terms with investors such as Singapore sovereign wealth fund Temasek Holdings Pte. that later cost the firm $4.9 billion. He recruited a chief financial officer with no experience at a securities firm, while more than 40 senior executives, bankers and traders departed. In the end, he merged Merrill into a large bank -- a step O’Neal concluded was needed in mid-2007, when the stock was trading at more than six times the price it is now.
