Updated to correct the value of Goldman CEO Blankfein's stock compensation.
NEW YORK (
) -- What a difference a crisis makes for
's new boss, John Thain.
In 2010, Thain will likely make less than 10 percent of the $83.1 million he took home at
in 2007, when he earned more than any other CEO of an S&P 500 company, according to a 2008
study. That is an especially impressive feat, considering Thain joined Merrill from
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
' boss Lloyd Blankfein made in stock awards in 2009, nor the $17million worth of shares granted to
chief Jamie Dimon.
Thain, a longtime Goldman executive, got credit for turning around NYSE Euronext, though the fact that the stock has collapsed since he left in late 2007 also suggests his timing couldn't have been better. Thain also showed good timing at Merrill, selling the company to
Bank of America
in September 2008 for $50 billion when shareholders could easily have ended up getting wiped out.
CIT Group shareholders, of course, are counting on a long-term rebuilding effort, and they don't appear to be wowed by the hire. After bidding up the stock more than 4% Monday morning, it was up less than 1% by the early afternoon. The CRT analysts note the new job is a bit of a departure for Thain, as he has never run a deposit-focused lender.
Written by Dan Freed in New York