Thain Replaced Just Hours after Stepping Down from BofA
In a matter of hours, John Thain -- who stepped down Thursday from his position as president of global banking and wealth-management at the newly combined Bank of America Corp. (BAC) and Merrill Lynch & Co. -- was replaced by Bank of America's General Counsel Brian Moynihan. The naming of Brian Moynihan, 49, as Thain's replacement might suggest Charlotte-based Bank of America is now firmly in control of Merrill after an attempted power-sharing agreement with Thain. Moynihan is considered one of several possible successors for the 61-year-old Lewis, should he retire; Although, Lewis has said he would remain CEO until at least 2010. Bank of America isn't offering details surrounding the resignation of Thain, who was reportedly asked to step-down by CEO Ken Lewis in a short meeting Thursday. The only public mention of Thain's resignation came in press release announcing Moynihan's appointment: "Moynihan replaces John Thain who is leaving the company," the press release read. That was the extent of it. John Thain, 53, received wide-spread praise on Wall Street after agreeing in September to sell troubled securities firm Merrill, which was on shaky ground because of a crisis of confidence among investors and partners. But after repeatedly underestimating Merrill's capital needs, observers began to question Thain's credibility. Most recently, Merrill posted a $15.31 billion quarterly-loss, causing Bank of America to seek additional aid from the government, as Thain allegedly lobbied behind the scenes for a multimillion dollar bonus. According to CNBC, Thain even hired famed decorator Michael Smith -- chosen by the the Obama family to decorate the White House -- to redecorate his downtown Manhattan office last year at a cost of $837,000, during a time when his company was processing lay-offs. Bloomberg reported Lewis began to lose confidence in Thain in December, when he learned of Merrill’s larger than expected loss from members of his own merger team, according to a person familiar with Lewis. Lewis indicated that he thought Thain should have been more proactive in keeping him apprised of the results, according to this person, Bloomberg said. Bank of America emphasized in their announcement Thursday that the "change in leadership in no way reflects a significant change in direction for the Global Banking or wealth management units." And Lewis expressed the utmost confidence in Moynihan to successfully carry-out the position's duties. Previous to the merger with Merrill Lynch, Moynihan ran Global Corporate and Investment Banking for Bank of America. Before that, he was President of Global Wealth and Investment Management at the company. "Brian Moynihan is a strong manager and one of those people who can effectively envision strategy and execute," Lewis said. "He has excelled at everything we have asked him to do." Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.