John Thain, former chief executive of Merrill Lynch, so desperately seeks redemption that he is willing to run a subprime business lender that went bankrupt and stiffed almost everyone in America.
I have some advice that may help him as the new CEO of CIT Group:
• Write a memoir called “Ken Lewis is a Chump.” The former Bank of America CEO bought Countrywide Financial in 2008. Anyone dumb enough to buy a mortgage company as the mortgage market collapses is dumb enough to buy a stock brokerage as the stock market collapses. You were smart to recognize this.
• Send Lewis a valentine. So what if Lewis fired you and blames you for undisclosed losses and obscene bonuses at Merrill Lynch as he bought the whole farm. Lewis is the one being charged by New York Attorney General Andrew Cuomo. Besides, Merrill Lynch is profitable now. Include some heart-shaped candies that say things like “Puppy Love,” “Get My Drift” and “Wise Up.”
• Send Cuomo a valentine. A simple “I love you” will do.
• Hire former Merrill Lynch people. Your swift dealings with Bank of America saved many of their jobs, kept their bonus pool filled with nearly $4 billion and levitated their stock value as rival firms such as Bear Stearns and Lehman Brothers vaporized themselves. Surely, your old friends from Merrill Lynch can help you find the next Ken Lewis.
• Issue a press release claiming CIT will be “intensely focused on” repaying the $2.3 billion it took from the Troubled Asset Relief Program. You’re not legally required to repay it. Thanks to the miracle of Chapter 11, it has already been counted as another taxpayer loss. But a good press release makes a good impression, even if it never comes true. Like the one you put out in 2008 as your losses mounted at Merrill Lynch: “As I look ahead to 2008, the firm is intensely focused on . . . increased profitability.”
• Never let on that you are like Lee Majors in “The Six Million Dollar Man.” Salary: $500,000. Bonus: $1.5 million. Restricted stock: $5.5 million. Oh, wait. That makes you the $7.5 million man. That’s still not anywhere near what you’re used to getting, but it’s good pay from a company that didn’t repay its TARP funds.
• Never let people think CIT Group is Citigroup. You wouldn’t want to be CEO of that propped-up financial corpse, or would you?
• Wear a ski mask whenever you go to Vail. Being sighted on the slopes in December 2008, while the losses piled up at Merrill Lynch, was simply bad form. If people see you skiing again, they might wonder if even more losses are coming at CIT.
• Next time you come to Colorado, buy a desk from Office Liquidators. They have a nice selection of used furnishings from failed banks. Remember: The $1.22 million you spent redecorating your office at Merrill Lynch cost your reputation a lot more than $1.22 million.
• Don’t use the executive bathroom at CIT. People still think you spent $35,000 on a toilet as Merrill Lynch was nearly flushed down the toilet. Yes, I know. It wasn’t really a toilet. It was an antique commode. But urinating in the same pot as everybody else will do you some good.
• Wear a suit every day. You told The Wall Street Journal in April that you wore a suit most days even though you didn’t have an office to go to in the morning. Well, congratulations! Looks like this strategy paid off. Somehow, people still trust a man in a suit. Even you.
Al Lewis: 212-416-2617, al.lewis@dowjones.com or
