Thain's Massive Pay Cut

Updated to correct the value of Goldman CEO Blankfein's stock compensation.

NEW YORK (TheStreet) -- What a difference a crisis makes for CIT Group(CIT)'s new boss, John Thain.

In 2010, Thain will likely make less than 10 percent of the $83.1 million he took home at Merrill Lynch in 2007, when he earned more than any other CEO of an S&P 500 company, according to a 2008 Associated Press study. That is an especially impressive feat, considering Thain joined Merrill from NYSE Euronext(NYX) in November of that year.

According to a filing by CIT with the Securities and Exchange Commission on Monday, Thain will earn a $500,000 base salary and a "long-term incentive award" that is "expected" to be worth $1.5 million. He will also earn $5.5 million in restricted stock, $2.5 million of which he will have to hold for at least a year, with the remaining $3 million subject to a three-year holding period.

CRT Group analysts Kevin Starke and Robert Goodman wrote Monday that CIT was getting Thain for "a relatively bargain price compared to other financial services industry CEOs and to what he was paid previously at Merrill." However, while they praised the fact that most of Thain's pay is in stock, they argued that the one- and three-year holding periods are "relatively short-dated" and aren't as effective an indication of long-term confidence as stock options might have been.

Thain may look like a bargain compared to many financial services CEOs, but not alongside the $9 million Goldman Sachs (GS)' boss Lloyd Blankfein made in stock awards in 2009, nor the $17million worth of shares granted to JPMorgan Chase (JPM) chief Jamie Dimon.