NEW YORK (
) -- Can Ex-Merrill Lynch CEO John Thain repair lending giant
CIT, which is the largest lender to supermarkets and apparel retailers, recently pulled itself out of bankruptcy protection. The firm was forced into bankruptcy at the end of last year when it was unsuccessful at restructuring its debt.
At the time, CIT received $2.3 billion from the Treasury Department.
in just six weeks because its key bondholders had already approved a reorganization plan. The company was able to cut its debt by $10.5 billion and deferred debt maturities for three years.
Since then, CIT has begun lending again, committing to fund $500 million in new government-guaranteed loans to small business customers.
But CIT's image is still rocky, leaving Thain to repair the markets skeptical view on the company. This may prove difficult, as Thain has his own tarnished image to haul around.
Thain, of course, facilitated the sale of Merrill to
Bank of America
back in 2008, but was then kicked out after the deal closed.
At the time, Thain was criticized for doling out $3.6 billion in bonuses to Merrill employees right before the deal closed. He also reportedly spent $1 million to redecorate his office.
"Much has been accomplished in recent months to position CIT for renewed success," Thain said in a statement. "We will build upon this progress and work even harder to support small and mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs."
Thain will replace CEO Peter Tobin, who will remain on CIT's board of directors. Tobin has been heading up the company since Jan. 15 when former CEO Jeffrey Peek retired.
Thain will receive a base salary of $500,000, as well as $5.5 million in stock annually, $2.5 million of which will be subject to a one-year holding period. The other $3 million cannot be sold for three years. He is also eligible to receive up to $1.5 million in bonuses based on the performance of the company.
Thain previously served as the CEO of the New York Stock Exchange and as president and chief operating officer at
In light of all this, we ask you: Do you think Thain will be able to fix what ails CIT? Take our poll below to see the consensus of
-- and don't be afraid to voice your opinion in a comment.
-- Reported by Jeanine Poggi in New York.
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