That might be a rhetorical question because I'm not sure some ever will. Recent news that former Merrill Lynch CEO John Thain spent 1.22 million bucks to decorate his office is simply disturbing.
Now, I'm assuming that he spent Merrill's dollars on this renovation debacle. Or, it certainly wouldn't be such a front page, controversial story if this wasn't the case.
Here's the problem with Thain. The man took over more than a year ago from Stanley O'Neal to steer Merrill's ship out of extremely choppy waters after it became public that the firm had lost tens of billions of dollars in mortgage-backed securities. Merrill was hemorrhaging at that point. The Board was up in arms and investors were panicking.
As a former Merrill shareholder, I remember the angry emotions felt because I thought we had been taken for another incorrigible Wall Street scandal. And, that indeed was the case.
So, John Thain comes riding in, fresh from helping to fix (and add much needed credibility) to the then maligned New York Stock Exchange. And, he pledged to try and do the same thing at Merrill. This meant uncovering all of the bad investments, making strategic moves to shore up business and, of course, cutting all costs to close the gap on the bleeding losses.
Now, we find out that this man actually defines the word hypocrite and basically deceived us all. Spending that amount of money on his office, during the toughest times, is simply unacceptable (actually most would agree that blowing that sum of money on an office at any time is pathetic.)
The amount of money he spent has no real material impact on Merrill's earnings or problems. No, it's just the fact that he preached austerity, yet lived high and mighty, which truly annoys this former shareholder beyond belief.
And, why did he make such a dumb and selfish move? We'll never really know that. But, my guess is that the pure ego of a Wall Street titan easily won the battle over common sense.
I can't wait to see the law suits pile on even higher because of this arrogant stunt. This public relations disaster, taking place in the heart of an unpopular government bailout, will provide Mr. Thain with little comfort or relaxation as he is pushed out into the sunset.