Former Merrill CEO Thain resigns from BofA

Executive comes under fire for spending 1.22 million on his office remodel

NEW YORK - Former Merrill Lynch chief executive John Thain will resign from Bank of America, effective immediately.

Earlier,
Bank of America’s shares fell sharply after a report that executives
are meeting to discuss Thain’s future with the company.

A
report on CNBC followed news that Merrill, which was about to report a
$15.45 billion fourth-quarter loss, decided to move up its year-end
bonuses, doling out cash just days before it was officially acquired by
Bank of America on Jan. 1.
The
outlays recall heavy spending on personal items by senior executives at
other companies, including a $6,000 shower curtain owned by former Tyco
International Ltd chief Dennis Kozlowski, and an office fish tank
acquired by former Citigroup Inc executive Todd Thomson.

.

In the addition to the $1.22
million redesigning his office — including $35,115 for a "commode on
legs" — when he became CEO of Merrill Lynch a year ago, Thain also paid
his driver $230,000 for one year's work, which included the driver's
$85,000 salary and bonus of $18,000, and another $128,000 in over-time
pay, documents show. Drivers of top executives are often paid about
half that amount.

Such
expenses would have followed $12.2 billion of net losses at Merrill in
the second half of 2007 as writedowns on mortgages and other toxic debt
began to mount. Thain became chief executive in December 2007.
Bank of America has increasingly come under
criticism in recent weeks for its acquisition of Merrill Lynch. The
deal forced Bank of America to ask for a second multibillion dollar
investment from the government as it absorbed the mounting losses at
the New York-based investment bank.

On Thursday, Bank of America said it knew of Merrill’s plans to move up the bonuses.
“Merrill was an independent company until Jan.
1 of 2009,” said Bank of America spokesman Scott Silvestri. “John Thain
decided to pay year-end incentives in December, as opposed to their
normal date in January. Bank of America was informed of his decision.”

Bonuses
were not paid, though, to Thain and four other top executives —
President and COO Greg Fleming, Chief Financial Officer Nelson Chai,
President of Global Wealth Management Robert McCann, and General Counsel Rosemary Berkery — who requested they not receive additional compensation.

Bank
of America last week struck a deal with the government to receive an
additional $20 billion in funds as part of the Treasury Department’s
bank investment program. The government also agreed to backstop losses
on additional assets. The investment comes after Bank of America
already received an initial $25 billion as part of the program.