• Former boss of Wall Street firm was criticised over bonuses and his expensive office refurbishment
• New role as head of CIT, the troubled US lender, could net him $5.5m in shares

John Thain, the former boss of Merrill Lynch, returned to the business world today when he was named as the new chief executive of troubled US commercial lender CIT Group.

The company announced early this morning that Thain had been chosen as its chairman and chief executive with immediate effect. The appointment comes just over a year after Thain was fired by Bank of America, following its controversial takeover of Merrill.

CIT is one of the biggest providers of capital to small and medium-sized American companies. It filed for bankruptcy protection last November, having suffered a rise in bad debts as its customers suffered from the economic downturn.

Thain, who will receive a salary of $500,000 (£320,000) a year plus $5.5m in shares, said CIT could play a key role in America’s economic recovery.

“If we’re going to get the US economy to continue to grow, if we’re going to create jobs, then we need to have this kind of a company do well,” he said.

The move will give Thain the opportunity to rebuild his own reputation. He has been criticised for the decision to pay bonuses totalling $4bn to Merrill workers in December 2008, just before the merger with Bank of America was finalised. He also apologised for spending $1.2m refurbishing his office, a bill that included $35,115 for an antique commode.

Thain has admitted that he struggled to cope with life beyond Wall Street. In an interview last April, he said he still donned a suit most days, even though he no longer had an office to go to.

Thain’s appointment also shows that, while the global recession has cost millions of people their jobs, senior bankers can find fresh employment. In the UK Sir Fred Goodwin, the disgraced former boss of Royal Bank of Scotland, took a position with Scottish architects RMJM last month. Adam Applegarth, the ex-chief executive of Northern Rock, is now advising US private equity firm Apollo Management.