Dr. Weeks’ Comment: Like the rest of us???
Thain Says He Should Have Furnished Merrill at Ikea (Update2)
By Michael J. Moore and Dakin Campbell
Sept. 18 (Bloomberg) — John Thain, the former chief executive officer of Merrill Lynch & Co. who was accused of overspending on an office renovation as the broker teetered, said he should have bought less-expensive furniture at Ikea.
“We decorated it in the style that Merrill Lynch offices were, which was very, very nice,” Thain said yesterday during a speech in Philadelphia. “That was a mistake, and I’m sorry that I did that. If I had that to do over again, I’d furnish it in Ikea.” His remark was met with laughter and applause at the University of Pennsylvania’s Wharton Business School.
Thain, 54, said he reimbursed the company for $1.2 million spent to redecorate an office, two conference rooms and a reception area. He was dismissed from Bank of America Corp., which bought Merrill Lynch on Jan. 1 for $29 billion, after the renovations came to light. The furniture included a $35,000 commode — “not a toilet, it’s a chest of drawers,” Thain told the crowd — and a $25,000 antique mahogany pedestal table.
“John, stop by Ikea anytime,” said Mona Astra Liss, a spokeswoman for the retailer, known for assemble-it-yourself furniture and in-store restaurants. She offered to show “a wealth of furniture choices” for home and office, “and feed you Swedish meatballs, too.” Ikea, founded in Sweden and registered in Leiden in the Netherlands, sells a 3-drawer chest for $49.99.
Bank of America CEO Kenneth Lewis fired Thain after Merrill’s $15.3 billion loss forced the company to seek more government aid and amid disclosures he accelerated year-end bonus payments to Merrill employees before the deal closed.
Bonuses and Losses
Thain said he didn’t speed up the bonuses and Charlotte, North Carolina-based Bank of America shouldn’t have been surprised by the fourth-quarter loss.
“When I got fired in January and they said ”˜John Thain secretly accelerated these bonuses,’ they were lying,” Thain said. “And that has now trapped them into a lot of trouble, because there is a document that says yes, in fact, they agreed to this in September.”
Thain declined to answer when an audience member asked his opinion of Lewis. A Bank of America spokesman, Scott Silvestri, didn’t have an immediate comment on Thain’s remarks.
New York Attorney General Andrew Cuomo is investigating the Merrill acquisition, and whether Lewis failed to disclose Merrill’s mounting losses and $3.6 billion in bonuses before the sale was approved. Cuomo subpoenaed five Bank of America board members, a person close to the investigation said yesterday.
Bank of America’s acquisition of Merrill came after the world’s biggest brokerage sought a partner during the same September weekend in which Lehman Brothers Holdings Inc. collapsed.
To contact the reporters on this story: Michael J. Moore in New York at firstname.lastname@example.org; Dakin Campbell in San Francisco at email@example.com