John Thain: America's New Sun King


Louis XIV (1638–1715), by Charles Le Brun

On July 18, 1668 in the gardens of Versailles, Louis XIV threw quite a fête for himself to celebrate his military victories. "Le Grand Divertissement royal," it was called, and cost one-third the yearly budget of Versailles. Royal parties were expensive. So Louis raised taxes -- relying heavily on the peasants -- and forced prosperous towns to pay homage of huge sums.

The Sun King was well known for his opulent extravagance. This is best exemplified by the construction of his palace at Versailles, his Hall of Mirrors and over the top baroque furnishings. Louis' motivation was not based just on his eye for luxury, but it was also a way of controlling the nobility, reducing their power and keeping a sharp eye for any potential rivals. Louis was flattered by all as much as he was feared. He insisted on his particular daily rituals, the Levee and the Coucher. Around 8:30 am the king, resting in his bed, would hear: “It is time, Sire”. The levee was a ceremonial rising just for him. Doctors, family and a few favored friends entered the king's bedroom where he was washed, combed, shaven and dressed. Then he slurped down a breakfast of broth with everyone standing around. It was estimated the attendants numbered one hundred, all male. At 11:30 pm, The Coucher, was performed -- a reverse, shortened version of the levee to celebrate Louis retiring to bed.



Skip to nearly four-and-a-half centuries later in America and I can’t help to see some similarities. John Thain’s task last year was to oversee the sale of Merrill Lynch to Bank of America Corporation and take over the bank's wealth management and corporate and investment banking divisions. He had to reduce expenses and fix the security firm. In order to get his wits about him, he needed to spend $1.2 million of the bank's money to lavishly redecorate his Merrill Lynch office while major layoffs were looming and the firm was going down in flames.

Thain hired (the fabulous) Michael Smith for $800,000 to create an environment where he could adequately think about this mess. Smith procured two area rugs for a total of $131,000, two guest chairs for $87,000, a nineteenth-century sideboard (mistakenly called a ‘credenza’) for $68,000, four pairs of drapes at $28,000, Roman shades for $11,000, a mahogany pedestal table at $25,000, a George IV Desk for $18,000, a sofa for $15,000; a custom coffee table for $16,000; Regency Chairs for $24,000 (personally, I question if they were period and designers out there: is this appropriate for a commercial application?); 40 yards of fabric for wall panels for $5,000, six wall sconces for $2,700, and a parchment covered trash can for $1,400.

In his private dining room he ordered six chairs for $37,000, a mirror for $5,000, and a chandelier for $13,000. And lastly, a $35,000 "commode on legs." (I assume this means a toilet and not a French dresser.)

Thain signed off on the purchases, as well as, "Labor to relamp the six wall sconces" for $3,000, and another payment of $30,000 to pay additional expenses Smith had incurred.

Michael Smith is being paid $100,000 to redecorate for the Obamas, which includes items from Target. (According to The Daily Beast), by the way.


We live in a society where an outrageous level of compensation is a justifiable reward for executives. Apparently, this level of extravagance is standard operating behavior. And apparently, high-profile CEO’s have the power, magnitude and all the glory of kings.

Are the rest of us mere peasants? According to the Bureau of Labor Statistics the national average salary is a little over $40,000, or in other words, approximately one thirtieth of Thain's expenses for the redecoration of his office.

Bank of America received $25 billion in bailout funds and then an additional $20 billion mid January while Thain spent $1.2 million to have his office redecorated out of the profits of the company as previous employers he axed were out of work. Merrill Lynch lost $56 billion from sub prime loans and the credit crisis, so what’s another $1.2 million, eh John? As Marie-Antoinette allegedly uttered a century later, “Let them eat cake?” – and we all know what happened to her.

Hey Thain, what principles were this great country founded upon?

(Thain resigned at the end of last month after being found out and has vowed to repay the funds. Must be a drop in the ocean from his end-of-the-year bonus.)