138 as “the most vulnerable brokerage after Lehman”: Reinhardt Krause, “Lehman Bros. Extends Slide as Wall St. Doubts Future,” Investor’s Business Daily, June 13, 2008.
139 For a single day John Thain had the job he had wanted for his entire career: Kassenaar and Onaran, “Merrill’s Repairman,” Bloomberg Markets. Craig Horowitz, “The Deal He Made,” New York, July 10, 2005.
139 At Robert Hurst’s Fifth Avenue apartment: Ellis, The Partnership, 613.
139 Corzine off skiing in Telluride, Colorado: Ibid.
139 Thain, a longtime lieutenant and friend of Corzine: Ibid. Corzine had long been an ally of Thain’s, helping him secure the chief financial officer job in 1994 and later a spot on the executive committee. They went skiing together in Colorado and dined out with their wives in Manhattan. Thain was the trustee-designate for the Corzines’ children’s trusts. See also Noam Scheiber, “The Brain in Thain,” New York, January 8, 2007.
139 Thain was the one to have to break the news to him: Ibid.
139 “Jon has decided to relinquish the CEO title”: Ibid.
139 accumulating several hundred million dollars in stock from the IPO: After Goldman’s IPO, Thain’s 3.1 million shares were worth about $171 million. Kimberly Seals McDonald, “Goldman’s Bounty—Top Execs Will Pocket up to $869m in IPO,” New York Post, April 13, 1999; Erica Copulsky, “Goldman Notifies Top Non-Partners of Payout Formulas,” Investment Dealers Digest, May 3, 1999.
140 he bought a ten-acre property in Rye: Charlie Gasparino, “John Thain’s $87,000 Rug,” Daily Beast, January 22, 2009.
140 determined to take a two-week trip to Vail at Christmastime: Susanne Craig and Dan Fitzpatrick, “Merrill Architects Criticized,” Wall Street Journal, January 20, 2009.
140 he took Thain out to dinner: Ellis, The Partnership, 660.
140 leaving to become CEO at the New York Stock Exchange: While Thain’s NYSE appointment was confirmed on December 18, 2003, his first day was not until January 15, 2004. “Recap of Stories on NYSE Naming Goldman’s Thain As CEO,” Dow Jones, December 18, 2003.
141 was paid a $15 million signing bonus: Cardiff de Alejo Garcia, “Financial News: Thain to Get up to $11M from Restricted Shares,” Dow Jones, September 16, 2008.
141 raised $12.8 billion from the sovereign wealth funds: Other investors in this group include Japan’s Mizuho bank group and the Korea Investment Corp. Jed Horowitz, “Merrill Seeks Intl Investments for Itself, Clients: Pres,” Dow Jones, February 6, 2008.
141 He also went about slashing costs: Susanne Craig, “The Weekend That Wall Street Died,” Wall Street Journal, December 29, 2008.
141 flowers that were costing the firm some $200,000: Ibid.
142 a signing bonus of $39.4 million, even though Montag wouldn’t begin work: An SEC filing revealed that in addition to Montag’s $600,000 annual salary, Merrill agreed to pay him a bonus of $39.4 million in cash and stock-based compensation for fiscal year 2008, which he would receive in January 2009. “Merrill Lynch to Pay New EVP Montag $600,000 Salary,” Dow Jones Corporate Filings Alert, May 2, 2008.
142 Thain would hire Peter Kraus: Kevin Kingsbury, “Kraus the Latest Ex-Goldman Hire at Merrill,” Dow Jones, May 5, 2008; Heidi N. Moore, “Merrill’s K raus Gets $25M, Then Leaves,” Dow Jones, December 22, 2008.
142 And then there was his office: Charlie Gasparino, “John Thain’s $87,000 Rug,” Daily Beast, January 22, 2009.
142 angling for the Treasury Secretary post if John McCain: Louise Story and Julie Creswell, “Love Was Blind,” New York Times, February 8, 2009.
143 “It’s kind of ‘Raise as you go’ ”: Fair Disclosure Wire, June 11, 2008.
143 Thain and O’Neal breakfast: During break fast between John Thain and Stan O’Neal, Thain pressed him to give him some guidance about his views on the management team. O’Neal replied, “The only person you ought to watch out for is Bob McCann.” McCann was the head of the firm’s brokerage business and the two had a long-standing mutual distrust.
144 Merrill’s $27 billion in CDO and subprime: In November 2007, Merrill announced that its total exposure to subprime mortgages and collateralized debt obligation was $27.2 billion. UBS analyst Glenn Schorr said that hiring Thain “doesn’t change the fact that Merrill has $27 billion of CDO/subprime exposure and is likely facing further write-downs in the near term.” “Thain to the Rescue,” Investment Dealers Digest, November 19, 2007.
144 [O’Neal rise]: John Cassidy, “Subprime Suspect: The Rise and Fall of Wall Street’s First Black C.E.O,” New Yorker, March 31, 2008; David Rynecki, “Can Stan O’Neal Save Merrill?” Fortune, September 30, 2002.
144 Merrill’s beginnings, Wheaties, “Bullish on America”: “Charles Merrill, Broker, Dies, Founder of Merrill Lynch Firm,” New York Times, October 7, 1956; “Advertising: Jackpot,” Time, August 20, 1951; Joseph Nocera, “Charles Merrill,” Time, December 7, 1998; Suzanne Woolley, “A New Bull at Merrill Lynch,” Money, March 1, 2002; Helen Avery, “Merrill Shrugs Off the Herd Mentality,” Euromoney, August 1, 2004.
145 “I think this is a great firm”: Charles Gasparino, “Bull by the Horns,” Wall Street Journal, November 2, 2001.1.
146 “Ruthless,” O’Neal would tell associates, “ isn’t always that bad ”: David Rynecki, “Putting the Muscle Back in the Bull,” Fortune, April 5, 2004.
146 O’Neal’s top management team as “the Taliban” and calling O’Neal “Mullah Omar”: Ibid.
147 acquired one of the biggest subprime mortgage lenders in the nation, First Franklin: Erick Bergquist, “Merrill Wins Bidding for First Franklin,” American Banker, September 6, 2006.
147 left Merrill in February 2006: Avital Hahn, “Leading CDO Team Breaks into Two; Ricciardi Joins Cohen Brothers as CEO,” Investment Dealers Digest, February 27, 2006.
147 “whatever it takes”: Kim, as three people heard and remembered him saying. Serena Ng and Carrick Mollenkamp, “Merrill Takes $8.4 Billion Credit Hit,” Wall Street Journal, October 25, 2007.
147 replaced by thirty-nine-year-old executive Osman Semerci: Bradley Keoun, “Merrill Names Semerci, D’Souza to Run FICC, Equities,” Bloomberg, July 25, 2006.
148 Kim took home $37 million: SEC filing disclosed a $14.45 million cash bonus and a $22.2 million stock incentive bonus, in addition to his salary of $350,000. See Nicolas Brulliard, “Merrill Lynch Exec VP Fleming Gets $20.4M Stk Bonus,” Dow Jones Corporate Filings Alert, January 24, 2007.
148 Semerci, more than $20 million: Louise Story, “Bonuses Soared on Wall Street Even as Earnings Were Starting to Crumble,” New York Times, December 19, 2008.
148 Fleming and Fakahany sent a letter to Merrill’s directors: Cassidy, “Subprime Suspect,” New Yorker.
148 O’Neal sent an overture to Wachovia about a merger: Jenny Anderson and Landon Thomas Jr., “Merrill’s Chief Is Said to Float a Bid to Merge,” New York Times, October 26, 2007.
149 “I wouldn’t hire Stan to wash windows”: Cassidy, “Subprime Suspect,” New Yorker.