Report: Merrill Lynch CEO Will Step Down
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The chief executive of Merrill Lynch & Co., Stan O’Neal, has decided to leave the company, the Wall Street Journal reported on its Web site yesterday. The newspaper, citing an unnamed person familiar with the matter, said the announcement of the departure could come today.
The company’s board of directors is expected to launch its search for a replacement this week, and leading the list of candidates is the chief executive of money manager BlackRock Inc., Laurence Fink. A co-president of Merrill Lynch, Gregory Fleming, is also in the running, as is the head of the brokerage arm for the bank, Bob McCann.
The news of Mr. O’Neal’s departure comes on the heels of the release last week of Merrill Lynch’s weak third-quarter numbers. The investment bank announced a write-down of more than $3 billion, on top of the $5 billion write-down it previously disclosed as a result of the subprime mortgage meltdown; it also reported a net loss of $2.24 billion for the quarter.
Last week, the New York Times reported that Mr. O’Neal had approached the chief executive at Wachovia, G. Kennedy Thompson, about a possible merger between Merrill Lynch and the Charlotte, N.C.-based bank. Mr. O’Neal did not consult with the board of directors before approaching Mr. Thompson, reportedly fueling the board’s ire. According to the reports, Mr. Thompson said the timing was not right for combining the banking giants.
Merrill Lynch posted far larger write-offs than any other investment bank as a result of this summer’s problems in the subprime mortgage market. One reason, critics say, is that Mr. O’Neal fired many senior executives at the investment bank after taking over in 2002.
“In 1998, Merrill Lynch lost $1 billion as a result of trading mistakes,” the CEO and president of FriedbergMilstein, and a former Merrill Lynch executive who left after Mr. O’Neal joined the firm, Barry Friedberg, said. “The movie played again in 2006 to 2007. And this time, all of the execs, except Stan, who saw the movie in 1998, and who as a group might have recognized what was happening, had been driven off the reservation by Stan.”
As speculation mounted on Friday that Mr. O’Neal was on his way out, Merrill Lynch’s shares soared, increasing by $5.19, or 8.5%, to $66.09 a share.
