NEW YORK — Bank of America Corp. Chairman and Chief Executive Kenneth Lewis told Merrill Lynch & Co. brokers Wednesday that Merrill Chief Executive John Thain would stay at the combined firm after the merger of the banks is completed, according to people familiar with the situation.
On Sept. 14, Bank of America agreed to purchase Merrill Lynch for $50 billion, or $29 a share. At a Sept. 15 press conference to announce the two firms' deal, Thain said he and Lewis "haven't had much time to talk about my role going forward," and declined to specify whether he would join the combined company.
Lewis, who met with top Merrill advisors in Arizona this week, said Thain is staying, but his role hasn't been determined. It also isn't clear how long Thain would stay, said people familiar with the situation.
However, his remarks were received warmly by the brokers in Arizona. Lewis was also applauded warmly especially when he said that Thain would remain at the merged firm.
"There was a strong applause when Lewis began and stronger applause when he was done," said a person familiar with the discussion at the meeting. "There's a tremendous amount of respect and affection for John Thain and it was evident when he said John Thain was staying," the same person said.
Scott Silvestri, a spokesman for Bank of America, said, "We have nothing to announce at this point."
Shares of Bank of America recently traded up $1.39, 4.2%, at $34.15. Merrill Lynch was down 35 cents, or 1.3%, at $26.10.
Some brokers who learned of Lewis' announcement in Arizona were jubilant. His tenure in Merrill is key to boosting morale among the ranks, particularly of those who feel shaky about the future of Merrill's retail brokerage force under the combined unit.
"I have a tremendous amount of respect for him," a broker said. "I like him better than Bob McCann," the broker added. McCann is vice chairman and president of Global Wealth Management at Merrill.
Thain took the reigns of Merrill in November, when the company ousted former CEO Stan O'Neal after Merrill made large bets on mortgage investments that have since failed, and cost the company tens of billions of dollars in losses and write-downs.
Prior to assuming his current role in December 2007, Thain served as CEO and a director of NYSE Euronext Inc. following the NYSE Group and Euronext N.V. merger in June 2006. Thain joined the NYSE in January 2004, serving as CEO and a director.
Before joining the NYSE, Thain was employed by Goldman Sachs Group Inc., where he served as president and chief operating officer.
His expected move to stay at the combined Bank of America-Merrill fanned speculations among some financial advisors that he could be promised of a position to eventually take over from Lewis.
"He's used to running big companies like NYSC and Merrill," according to a Merrill source. "Maybe what could be promised to him is some kind of a succession."