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Merrill Names CEO in Waiting

Transition: Stanley O'Neal is to become the first black chief executive of a major Wall Street firm.

July 23, 2002|From Bloomberg News

NEW YORK — Merrill Lynch & Co. said Monday that President Stanley O'Neal would succeed Chief Executive David Komansky, who is to retire about a year earlier than he had planned.

O'Neal, 51, will become the first African American CEO of a major Wall Street firm.

Komansky, 63, will remain chairman of the securities giant until retiring in April. O'Neal, who was named president of Merrill a year ago after serving as head of the firm's brokerage division, will become CEO in December.

O'Neal has helped lift Merrill's profit margins this year by slashing thousands of jobs and cutting other costs, as revenue has tumbled amid Wall Street's slump.

"Stan is ready to take on the role," Komansky said. "Everything just really seemed to fit in place to do it now as opposed to later on."

Merrill's board had been discussing plans for O'Neal's ascent for three months, Komansky said.

Making O'Neal CEO while Komansky remains chairman is consistent with past management transitions at Merrill.

O'Neal became president of Merrill after running the brokerage unit for 16 months. As head of the company's oldest unit, he cut about 2,000 support staffers and had its 15,000 U.S. brokers shift their focus to serving wealthy clients.

O'Neal, unlike his predecessors, never worked as a broker. He was Merrill's chief financial officer for two years starting in March 1998.

Before joining Merrill as an investment banker in 1986, O'Neal, a Harvard Business School graduate, worked in the treasurer's office of General Motors Corp.

O'Neal was born in a small farm community in Alabama and spent most of his childhood in Atlanta.

He was tapped to run Merrill's debt and equity capital markets worldwide in 1995, focusing mostly on building the business in Europe and Asia. In 1997, Merrill asked him to oversee all its corporate and institutional businesses.

O'Neal will be taking over the top spot in a year when Merrill's image has suffered a heavy blow: In May, the firm agreed to pay $100 million and change some of its research policies to settle charges by New York Atty. Gen. Eliot Spitzer that Merrill analysts gave investors tainted advice.

Spitzer accused the firm's Internet analysts of touting stocks to the public in 2000 and 2001 while privately disparaging them. The analysts' recommendations were aimed at keeping Merrill's investment bankers happy, Spitzer said.

Merrill settled the charges without admitting or denying guilt.

The company's shares fell $1.23 to $35.77 on the New York Stock Exchange on Monday amid the latest broad market plunge.

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