John Thain, the former CEO of Merrill Lynch, who found his reputation in tatters after Bank of America acquired Merrill in the midst of the financial crisis, has been given a second chance to revive his reputation. Yesterday, CIT Group CIT (NYSE) announced that Thain would immediately become the new CEO and chairman of the small business lender. CIT had gone into bankruptcy under the leadership of Jeffrey Peek who ultimately had to give up his leadership role of the firm.CIT has been a very important lender to small and mid-sized businesses. It finds itself coming out of bankruptcy and hopes Thain can work wonders with the firm. An article in Forbes summed up Thain’s situation with regard to the Bank of America acquisition of Merrill and how it impacted his reputation and firm.
As chairman and CEO of Merrill Lynch, Thain’s deal to sell Merrill was considered a lifesaving move for the company at the height of the financial crisis. But he then came under fire for having paid out $3.6 billion in bonuses to Merrill employees just before the deal closed, and for spending more than $1 million to redecorate his office at Merrill, despite its massive losses.
CIT announced yesterday, as the firm moves out of bankruptcy, that Thain would serve as the firm’s new CEO a
nd chairman. Thain replaces interim CEO Peter Tobin who will remain on the company’s board of directors. The decision to select Thain may actually be a good fit. Thain’s expertise could actually be very beneficial to CIT’s circumstances.
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