Management specialists said the two men seemed to serve as contrasting case studies in what to do — and not to do. "Thain did the right things and succeeded in keeping that business together and maintaining a lot of value," says Steven Kaplan, professor at the University of Chicago's Graduate School of Business. "It's not the outcome he would have preferred...[but] certainly it's a much better outcome than Lehman." Experts were impressed with the speed with which Mr. Thain engineered Merrill's sale; the deal was worked out within two days.
Unlike Mr. Fuld, who had run Lehman since 1993 and is the architect of the modern Lehman, Mr. Thain had been at Merrill Lynch just since December, when he was brought in to stanch the bleeding. He didn't have the same pride of ownership in Merrill that Mr. Fuld had in Lehman. That is why he was willing to sell $31 billion worth of mortgage-backed derivatives for 22 cents on the dollar in late July - far lower than many firms had been pricing those securities. And that is also why, seeing what had happened to Bear Stearns, Fannie and Freddie, and Lehman Brothers, he took the pre-emptive step of selling Merrill Lynch to Bank of America. In the process, he got $50 billion for Merrill's shareholders. True, that was half of what Merrill was worth a year ago, and a once-proud name is about to be swallowed up by a commercial bank. But he also got $50 billion more than Mr. Fuld got for his shareholders - and being sold is a lot better than being liquidated.