A Time for Change

John Thain, former Merril Lynch CEO, was the first executive who appeared to have no bailout  ”filter” in his head that would trigger the following thought:  ”Maybe that’s a dumb idea.”  According to The Daily Beast, Thain spent $1.22 million to refurbish his office at Merrill Lynch, which inlcuded:

1. $2,700 for six wall sconces.
2. $5,000 for a mirror in his private dining room.
3. $11,000 for fabric for a “Roman Shade.”
4. $13,000 for a chandelier in the private dining room.
5. $15,000 for a sofa.
6. $16,000 for a “custom coffee table.”
7. $18,000 for a “George IV Desk.”
8. $25,000 for a “mahogany pedestal table.”
9. $28,000 for four pairs of curtains.
10. $35,000 for something called a “commode on legs.”
11. $37,000 for six chairs in his private dining room.
12. $68,000 for a “19th Century Credenza” in his office. 
13. $87,000 for a pair of guest chairs.
14. $87,000 for an area rug in Thain’s conference room and another area rug for $44,000.
15. $230,000 to his driver for one year’s work. 
16. $800,000 to hire celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.

Thain ultimately resigned from his position and offered to repay Merrill for these expenditures, but only after coming under fire for the redecoration and the heavy losses sustained at Merrill even after the Bank of America was forced to buy Merrill by the bush administration.

Now Citigroup’s CEO is suffering from the same failure to filter.  Vikram Pandit first came under fire for the new $50 million corporate jet “in the wake of begging for – and accepting – bailout funds totalling $45 billion.”  According to Barron’s:

”I get the new reality,” Pandit told Congress. ”And I’ll make sure Citi gets it as well.”

Pandit will enjoy a primo spot from which to assay all that new reality being installed at the bank: his own personal chunk of the $10 million office renovation being conducted at Citi. According to a Bloomberg report, Pandit and his lieutenants are being treated to office renovations at the bank’s midtown headquarters that will tally that sum before the last endtable is installed.

Where’s the filter?  What happened to a real leader standing before his employees and saying that times are not great right now, the company is in trouble and I am not taking a salary this year and I need to ask all of you help the company get back on its feet with cost cutting measures across the board.  That would take a real leader.  

If we want to know what is wrong with our corporate culture and how these meltdowns in our financial system keep coming, one need only look at the huge entitlement that these executives have and that they look upon their positions as the opportunity to raid the corporation of assets rather than building a good and strong corporation.

We don’t build, we take.  Until that mentality changes, meltdowns will keep happening.

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