Don't Trip, Stan O'Neal Will Get Paid At Least $159 Million For Making White Folks (And A Few Of Us) Rich
Merrill Lynch’s directors may be weighing E. Stanley O’Neal’s future, but one thing is already guaranteed: the company’s chairman and chief executive is entitled to $30 million in retirement benefits as well as $129 million in stock and option holdings. That would be on top of the roughly $160 million he took home in his nearly five years on the job.
O'Neal, 56, joined Merrill in 1986 and has been CEO for nearly five years. He is the highest-ranking African American on Wall Street, and the first African American to run a major investment bank.
Under O’Neal, Merrill moved aggressively into lucrative businesses like the packaging of subprime mortgages and other complex debt securities. Last year, Mr. O’Neal’s $46.4 million pay package made him Wall Street’s second-highest paid chief executive, behind Lloyd C. Blankfein of Goldman Sachs, who was paid $54.3 million, according to Equilar research.
But those big bets appeared to go bust this week. Merrill announced an $8.4 billion write-down, raising questions about whether Mr. O’Neal will keep his job. It is unclear whether Mr. O’Neal will resign. But his $159 million exit package may not look all that egregious when compared with those of other executives. At Pfizer, for example, Henry A. McKinnell Jr. collected a $200 million exit package last year. At Morgan Stanley, Phillip J. Purcell walked out with $114 million in 2005. At Merrill, Mr. O’Neal works without a severance contract and would be expected to forfeit any unvested options. But the Merrill proxy says the compensation committee has “discretion” to award severance benefits.
Mr. O’Neal would walk away with an even bigger pay package if he left after a merger — a potential $274 million payout. That made the Wachovia offer personally lucrative. On Wall Street, of course, bad news can be transformed into good with the same type of alchemy that changed subprime mortgages into investment-grade securities. Even as Mr. O’Neal came under fire yesterday, investors bid up Merrill’s stock by $5.19. That gave Mr. O’Neal a paper gain of $16 million.
New York Times /ERIC DASH