Last month, I wrote that former Merrill Lynch CEO John Thain was one of the only Wall Street CEOs who actually deserved a bonus. The $10 million he was asking (and later backed off from) seemed justifiable in light of Thain's mystifying ability to sell Merrill to Bank of America (NYSE:BAC) for $50 billion last September.

Was I wrong? Absolutely. But not for the reasons I laid out at the time. Since then, it's become clear that whatever "value" Merrill seemed to have at the time, it's apparently gone now -- given last week's massive taxpayer bailout.

That alone is enough to chastise Thain for (although I think B of A should take the brunt of the blame) but, worry not, this executive pay story gets better.

Shortly after resigning yesterday, word spread that Thain spent $1.22 million sprucing up his office early in 2008 with a kingly collection of goods, according to CNBC; some of the more outrageous were:

  • Area rug -- $87,784
  • Pair of guest chairs -- $87,784
  • 19th century credenza -- $68,179
  • Commode on legs -- $35,115 (Get your mind out of the water closet; that's another name for a chest of drawers.)
  • Parchment waste can -- $1,405

If you're wondering, yes, that last one really is a $1,400 trash can. I'm going to assume it's made of parchment and not reserved exclusively for parchment that's being thrown away. Wasn't former Tyco (NYSE:TYC) CEO Dennis Kozlowski ridiculed for his $6,000 shower curtain affair? Even more dumbfounding, wasn't Thain brought in to run what's now NYSE Euronext (NYSE:NYX), replacing CEO Dick Grasso, who was entangled in, ahem, an excessive-pay dispute?  

Now, mind you, Merrill was still 100% independent and free from Uncle Sam's munificence when the decor was purchased. Thain was free to blow as much money as he pleased while having to answer only to Merrill shareholders, who were likely still under the impression he could turn water into wine.  

Last month, however, he had no such luxury. After -- yes, after -- B of A CEO Ken Lewis went to Washington to tell Ben Bernanke and Hank Paulson that Merrill was a lost cause and he needed to dump the remnants on taxpayers, Merrill followed through with an out-of-the-ordinary move to pay billions of dollars in bonuses in late December -- at least a month or two before they're typically paid.

Sound familiar? Another Wall Street boss was caught last month suspiciously trying to pay bonuses to his employees a few months early. His name was Bernie Madoff. I'm certainly not drawing any comparisons of potential criminality, but the same sort of "take-the-money-and run-before-it's-too-late" behavior Merrill has exhibited at Thain's lead is, to say the least, appalling. (Admittedly, as details emerged, it became clear that this wasn't the innocent act I passed it off as yesterday.)

Corporate greed and excessive CEO pay is, of course, nothing new. What's new this time is that we're literally dealing with a company that taxpayers have grudgingly backstopped for hundreds of billions of dollars.

This story is too good to die.

Further Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Bank of America is a former Motley Fool Income Investor selection. Tyco International is a Motley Fool Inside Value pick. NYSE Euronext is a Motley Fool Rule Breakers recommendation. The Motley Fool is investors writing for investors.