John Thain: American Sun King

Louis XIV (1638–1715), by Charles LeBrun

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, the infamous Hall of Mirrors and the 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 would hear: 'It is time, Sire'. The levee was a ceremonial rising especially for the king. Doctors, family and a few favored friends entered the King's Bedchamber where he is washed, combed, shaven and dressed. Then he slurped down a breakfast of broth with everyone standing around. Attendance was estimated at one hundred, all male. At 11.30 pm, The Couchee, was performed, is a reverse, shortened version of the levee to celebrate Louis retiring to bed.

Skip to nearly three-and-a-half centuries later in America: John Thain’s task 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 cut thousands of jobs, 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 the firm was going down in flames.

Thain hired Michael Smith for $800,000 to create an environment he could adequately think in. Smith procured two area rugs for a total of $131,000, two guest chairs for $87,000, a nineteenth-century sideboard 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 (I question if they were ‘in the style of’); 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 got six chairs for $37,000; a mirror for $5,000; a chandelier for $13,000.
And lastly, a $35,000 "commode on legs." (does this mean toilet? Dresser?)
The documents also show that Thain signed off on the purchases personally. "Labor to relamp the six wall sconces" cost $3,000, and Thain authorized the payment of another $30,000 to pay the expenses Smith incurred in doing the work.
Michael Smith is being paid $100,000 to redecorate for the Obamas, which includes items from Target. (According to The Daily Beast.)


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 and magnitude 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.

Thain resigned at the end of last month after being found out. Perhaps now he can understand what it is like to be a regualr Amercan down on his luck. However, I suspect he squirreled away enough money from his exorbitant bonuses to live high on the hog for a bit.

Merrill Lynch lost $56 billion from sub prime loans and the credit crisis what’s another $1.2 million, eh John?

Guest written by Le Petite Grande Dame