The former Merrill Lynch boss John Thain, who was ousted a year ago amid a furore over lavish office expenditure, has won a chance to rehabilitate his career by landing a $6m-a-year (£3.8m) job as chief executive of a struggling US lender to small businesses, CIT.
Thain will seek to turn around the fortunes of CIT – one of America's biggest providers of credit to shops, restaurants and clothing companies – which recently emerged from bankruptcy protection after negotiations to shed more than $10.5bn of debt.
The position amounts to a return to corporate life for Thain, 54, who was one of Wall Street's top names until he negotiated the sale of Merrill Lynch to Bank of America and became embroiled in a conspicuous bust-up with the brokerage's new owner. Unhappy about mounting losses, Bank of America accused him of profligate spending and cried foul over a $1.2m bill for refurbishing his office, including a $35,000 antique commode.
CIT's lead non-executive director, vice admiral John Ryan, described Thain as "a well-respected financial services executive and proven leader who is uniquely qualified to lead CIT at this critical stage".
He faces a tough challenge in getting CIT back on track. The 102-year-old lender provides short-term working capital to thousands of high-street names, ranging from Dunkin' Donuts to vendors of Dell computers. But it came close to collapse as the credit crunch wreaked havoc in the debt markets last year.
Thain will get a cash salary of $500,000, plus $5.5m of stock vesting over periods of one to three years, according to a regulatory filing by CIT.
He will head a much smaller organisation than he did at Merrill Lynch, or in his earlier position as chief executive of the New York Stock Exchange. CIT employs just 4,480 people but Thain told Bloomberg News that the firm plays an important role: "If we're going to get the US economy to continue to grow, if we're going to create jobs, then we need to have this kind of a company do well."
A year on, the deal negotiated by Thain to sell Merrill Lynch to Bank of America continues to cause controversy. New York's attorney general, Andrew Cuomo, has accused Bank of America of keeping investors in the dark about Merrill's losses and about $3.6bn of bonuses paid to staff.
After his departure in January last year, Thain insisted he had been transparent about Merrill's difficulties, although he admitted it had been a mistake to spend so much on his office refurbishment.
In his new job, Thain today said he would resist the temptation to redecorate: "I think I'll keep my office exactly the way it is."