CIT Names New CEO
Nearly two months after emerging from bankruptcy, CIT Group has chosen former Merrill Lynch executive John Thain to lead CIT as chairman and chief executive.
CIT Group Inc., the largest factor to the apparel and retail industry, said that Thain, who was appointed to the top position on Feb. 7, will take over immediately. The 54-year-old executive replaces acting interim Chief Executive Peter J. Tobin, who will remain on CIT’s board. Tobin had stepped in while CIT searched for a permanent replacement for Jeffrey Peek, who retired as chairman and chief executive on Jan. 15. #8232;#8232;
The board of directors asked Thain to continue CIT’s transition to a more streamlined commercial lender focused on serving the small-business and middle-market sectors and optimizing the company’s business model, according to a company-released statement.
As chairman and chief executive of Merrill Lynch, Thain brokered the deal to sell the investment bank to Bank of America during a time of financial crisis. But then he came under fire for having paid out $3.6 billion in bonuses to Merrill employees just before the deal closed and for spending more than $1 million to redecorate his office at Merrill, despite its massive losses. Thain resigned as head of global wealth management at the combined company shortly after the deal was completed.
Prior to Merrill, Thain served as chief executive of the New York Stock Exchange and president and chief operating officer of Goldman Sachs.
President and Chief Operating Officer Alexander T. Mason announced he was leaving the company Feb. 26. Chief Financial Officer Joseph Leone said he plans to retire in April. No replacements have been announced for those positions.
CIT’s board of directors also authorized a voluntary prepayment of $750 million on its $7.5 billion first lien credit facility. The debt will be paid from its available holding company cash position, which is in excess of $5 billion, according to the company.
The company also announced its latest installment of its 5 Minute Capital podcast will focus on the state of small business in the United States and its access to funding.
“The Importance of Financing Small Business” features Chris Reilly, president of small-business lending for CIT.
“I think it’s still very challenging and directly related to access to capital,” Reilly said. “For larger corporations, their ability to access capital is starting to normalize; however, small businesses are still struggling to get the funding they need for their business operations. Demand for financing is definitely on the rise. Recently, we announced that in 2010 we are allocating up to $500 million in funding for small business and that we are waiving the packaging fee on all new loan applications for a 90-day period. We are already seeing the results of that program in increased application flow.”
The entire interview, as well as the previous podcast, “The Changing Landscape of Vendor Financing,” can be found at www.5minutecapital.com.—Deborah Belgum
