CIT, emerging from bankruptcy, hires Thain as CEO

Thain, 54, immediately replaces interim CEO Peter Tobin, who will remain a director. Former CIT chief Jeff Peek, another past Merrill executive, retired on January 15.

CIT said Thain was hired partly for the expertise he gained restructuring the New York Stock Exchange, as it looks to re-establish itself after a disastrous foray into subprime lending, and one of the largest bankruptcies in U.S. history.

Within the last decade, Thain was the No. 2 executive at Goldman Sachs Group Inc , the No. 1 at both NYSE Euronext and Merrill Lynch, and was fired by Bank of America , which acquired Merrill in the midst of the mortgage-market inspired financial crisis.

CIT is not concerned about Thain's reputation after his short but controversial stint at Bank of America, and the board performed the appropriate due diligence before hiring him, said a person familiar with the company's thinking.

No specific terms of the contract were revealed.

Thain's compensation will be "in line with expectations in this day and age," John Ryan, CIT's lead director, said in an interview, adding Thain didn't want to stand out at a time that Wall Street executives are under fire for what is seen as out-sized compensations shortly after a recession.

CIT declined to say whether it was also in contract talks with Nelson Chai, who worked with Thain at Merrill and at NYSE Euronext, and who was reported as possibly involved in a contract deal that included Thain.

The company, which emerged from bankruptcy in December, said this month Chief Operating Officer Alexander Mason is set to step down February 26 as it revamps management and its board.

GOLDMAN, NYSE, MERRILL, BANK OF AMERICA... CIT