The Odd Couple

At first glance, John Thain and CIT might seem like an unlikely match. Thain, 54, earned a fortune working at the highest levels of some of New York's biggest and most powerful financial institutions. He was president of Goldman Sachs, CEO of NYSE Euronext, and chairman and chief executive of Merrill Lynch, which he sold to Bank of America for $50 billion in a now-controversial deal. Thain was famously forced out of Bank of America after the transaction, thanks to public outrage over bonuses paid to executives of bailed-out Merrill. Thain put a nail in his own coffin with a $1.22 million makeover of his executive quarters at Merrill, which included a $35,000 commode.

While former Bank of America CEO Ken Lewis fends off a lawsuit by New York attorney general Andrew Cuomo, who claims that BofA hid details of Merrill's losses from its shareholders, Thain has moved on to another job. On Monday, he was named CEO of CIT, a much smaller bank that made its name over the last century by funding small and medium-size businesses. For example, CIT is known for "factoring," a nuts-and-bolts financial practice in which companies borrow money so that they can produce inventory before they are paid for the goods. The inventory serves as collateral on the loan.

CIT was forced through Chapter 11 bankruptcy last year after former CEO Jeffrey Peek pushed the lender into subprime mortgages and student loans. CIT is the only TARP-funded company to go bankrupt, which has cost it plenty of political capital as well.

Thain and CIT, battered in the financial crisis, need one another. Thain is working for a fraction of his former pay. CIT is offering him $500,000 in salary and $5.5 million to $7 million in bonus, payable in restricted stock that vests over a period of years. But Thain has an opportunity to demonstrate his skills as a turnaround artist. If he is successful, he can sell CIT to another institution and move on to a bigger job. And CIT, which is unable to access the commercial paper markets, needs a well-connected financial player like Thain to figure out a new source of funding for CIT so that it can make loans.

One possibility: moving parts of CIT to Salt Lake City and combining them with one of CIT's deposit-taking banks.

It may seem like an odd pairing, but Thain appears to be embracing a more down-to-earth ethos. “What attracted me here is that CIT is a company that’s very important to small and medium-size businesses. 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," he told the New York Times.

And Thain seems unlikely to indulge his passion for expensive objets d'art.

At CIT, “I think I’ll keep my office exactly the way it is,” he told Bloomberg.