Now CIT is positioning itself as a crucial player in the administration’s effort to preserve and create jobs; it is one of the main providers of capital to businesses like small merchandisers and Dunkin’ Donuts.
“What attracted me here is that CIT is a company that’s very important to small- and medium-size businesses,” Mr. Thain said in an interview on Sunday. “If we’re going to see the U.S. economy continue to grow and see new jobs, we have to provide financing to those companies.”
Mr. Thain was forced out of Bank of America in 2009 amid controversy over billions of dollars in losses at Merrill, lavish spending on renovations to his office and several huge bonus payouts to Merrill employees. Since then, he has kept a low profile, considering job opportunities in areas like private equity. But he was approached by an executive search firm hired by CIT about two months ago.
“We saw tremendous upside to John,” John Ryan, CIT’s lead director, said in an interview on Sunday. “We think of him as an Olympic-class athlete with a lot of potential going forward. He’s the best person to position us to become profitable again.”
Jeffrey H. Aronson, a co-founder and managing principal of Centerbridge, a large CIT shareholder, said the firm supported the move. “Following its successful restructuring, CIT is well-positioned to continue its role as a leading lender to small businesses and the middle market,” he said. “John Thain is a skilled and proven business builder.”
Mr. Thain’s hiring was cleared by CIT’s regulators, including the Federal Reserve, the Federal Deposit Insurance Corporation and the Treasury Department, which still has a say over the company’s executive compensation despite the loss of the bailout investment.
Mr. Thain’s pay at CIT will be lower than he has made in years, according to people briefed on the matter. He will receive a $500,000 base salary, along with $5.5 million worth of restricted stock, much of which must be held for one to three years. He will also receive an additional discretionary payment of $1.5 million in restricted shares, which will vest over two years.
He pointed to his tenure at the New York Stock Exchange as a precedent, where he helped it rethink its business model. He took the exchange public, doing away with its long-held tradition of membership seats, and helped give it an international presence.