Following much speculation and drama over his inevitable departure, Merrill Lynch's Stanley O'Neal was kicked out... er, stepped down from his positions as company chairman and chief executive.
The top African American businessman had to leave the big house after Lynch posted $8 billion dollars in subprime losses. Merrill (Fortune 500) shares fell 1.4 percent in early trade Tuesday on the New York Stock Exchange.
The nation's largest brokerage said O'Neal, 56, would retire immediately and that board member Alberto Cribiore would take over for him as interim non-executive chairman. Merrill said both O'Neal and the board agreed that a change in leadership would help the company move forward as it attempts to overcome the $8 billion in losses it suffered last week.
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"We would like to thank Stan for the contribution he has made leading a major transformation of Merrill Lynch into a global and diversified company with enormous potential ahead of it," Cribiore said in a prepared statement devoid of any sincerity. Laurence Fink, chairman and CEO of investment firm BlackRock, in which Merrill owns a 45 percent stake; John Thain, CEO of NYSE Euronext; Bob McCann, the head of Merrill's brokerage division; and Gregory Fleming, Merrill's co-president and co-chief operating officer, have been reported as potential successors to O'Neal. Cribiore, who has served on the board since 2003, is a managing partner of the private equity firm Brera Capital. Previously he served as a president of private equity firm Clayton Dubilier & Rice. The company Tuesday also said that Fleming and Ahmass Fakahany will remain as co-presidents and chief operating officers.
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The company, currently dealing with racial emails being sent to Lynch's African American employees, did not indicate what kind of payout O'Neal would receive upon his exit. Analysts at the Corporate Library, which tracks executive compensation, estimated the figure to be as high as $250 million. Including salary and annual bonuses, O'Neal took home a total of $46 million in compensation in 2006.
In the firm's announcement Tuesday, O'Neal, whose career at Merrill spanned 21 years, thanked his colleagues for improving the company's competitiveness and expanding its global reach. "The company has provided me with opportunities that I never could have imagined growing up, culminating with my leadership of the company over the past five years," O'Neal said. According to a profile from Harvard Business School, where he got his MBA in 1978, O'Neal was born into poverty in Wedowee, Ala. He worked as a young boy picking cotton on a family farm, while his mother worked as a cleaning lady.
When O'Neal was 12, his family moved to Atlanta and his father went to work at General Motors. He rose through the ranks at Merrill, becoming president and chief operating officer in July 2001; he was tapped as CEO in December 2002 and added the title of chairman in April 2003.The posts made him one of the most powerful African-American executives on Wall Street, along with Kenneth Chenault (pictured right), who holds two titles at American Express. After taking over as chief executive, O'Neal quickly earned a reputation as an aggressive cost cutter. By slashing jobs and shutting down operations around the globe, he helped revive Merrill's stock, which reached an all-time high in January. Merrill shares have lost 33 percent of their value since this summer's market meltdown.
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