By Jennifer Yousfi
After executing a preemptive sale of investment bank Merrill Lynch & Co. Inc. (MER), Chief Executive John A. Thain will remain with Bank of America Corp. (BAC) after the merger, the Charlotte-based bank announced yesterday (Thursday).
"I am delighted that John has agreed to join Bank of America," Kenneth D. Lewis, Bank of America's chairman and chief executive, said in a statement, The New York Times reported. "His experience and expertise will be invaluable as we put our two companies together and move forward as the premier financial services company in the world."
Thain will oversee a newly created Global Banking, Securities and Wealth Management unit after the merger with Bank of America he negotiated for Merrill Lynch just last month.
Current Bank of America operations that account for this area make up approximately 35% of total revenue. That figure is only expected to increase after the merger.
But despite Thain's prominent role post-merger, Bank of America was quick to underscore the new position did not make Thain the heir apparent in eventually succeeding current CEO Lewis.
"There's been no commitment around that," BofA spokesman James Mahoney said in an interview with Bloomberg News. Thain "is joining the team as a senior leader."
Without a clear path of succession, industry analysts expect Thain's tenure in his new position as head of investment banking at Bank of America to be short. Most assume that Thain will be seeking another shot at the top spot elsewhere.
"The fact is that he's a CEO — he's not going to stay long," Greg Donaldson, director of portfolio strategy at Donaldson Capital Management, told Reuters.
Thain took over the top spot at Merrill Lynch in December 2007. At the time, analysts applauded the choice due to Thain's extensive Wall Street background.
Prior to taking over for ousted CEO E. Stanley "Stan" O'Neal, Thain was the chief executive of NYSE Euronext (NYX). Before Thain's time at NYSE, he was president and chief operating officer at Goldman Sachs Group Inc. (GS).
News and Related Story Links:
- The New York Times:
Thain to Take Role at Bank of America
- Money Morning:
O'Neal Finally Out at Merrill Lynch