"Merrill will pay for office space and a secretary for three years." Time to re-write my resume!


$160M parachute may soften O'Neal's fall

* Story Highlights
* Stan O'Neal out as chairman, CEO of Merrill Lynch
* World's largest brokerage firm reports $2.24 billion quarterly loss
* O'Neal will collect benefits package reportedly worth $161 million

NEW YORK (AP) -- Stan O'Neal was known as one of the most ruthless men on Wall Street -- clawing his way up from an impoverished upbringing in Alabama to run the world's largest brokerage.

His tough, take-no-prisoners drive at Merrill Lynch & Co. was celebrated when he delivered record profits during his five-year tenure as chief executive. But O'Neal, who was purportedly fond of saying "ruthless isn't always that bad," found out Tuesday that even he wasn't immune to the cutthroat ways of Wall Street.

After delivering investors a $2.24 billion quarterly loss -- Merrill's biggest since being founded 93 years ago -- O'Neal was forced to retire by a board of directors that he mostly picked. The unfolding credit crisis claimed its biggest corporate casualty so far, though O'Neal walks away with an exit package worth $161.5 million.

O'Neal's downfall took just six days from the time Merrill reported that record loss -- though some were surprised it took even that long.

"What did him in so quickly is that O'Neal failed to develop supporters who would defend him and fight hard at the board or executive level," said Richard X. Bove, an analyst with Punk, Ziegel & Co. "One of the reasons is that he fired 26,000 people, some of which were his supporters, and that made him vulnerable."

Whoever replaces O'Neal faces a daunting task -- so much so that the most widely tipped candidate, BlackRock CEO Laurence Fink, turned down an initial offer but has since engaged the board in active discussions, according to a person with direct knowledge of the offer who was not authorized to speak publicly.

Any successor will step into a Merrill Lynch that O'Neal aggressively transformed into a more diversified investment house from one that relied heavily on just stock trading.

The brokerage racked up record profits as he emphasized riskier bets than past Merrill CEOs. That strategy -- which handed Merrill Lynch record results during the market's peak -- came with a heavy cost during the tumultuous third quarter.

There is speculation by a number of analysts that Merrill Lynch faces a $4 billion writedown during the fourth quarter. This would be on top of a $7.9 billion charge taken last quarter, a stunning amount since Merrill originally said it would write down only $4.5 billion because of credit market turmoil.

O'Neal, 56, accepted blame for the losses, which immediately led to calls for his ouster.

Merrill Lynch still has a sizable portfolio of complex financial instruments called collateralized debt obligations, which combine slices of different kinds of risk. It was Merrill's bet on CDOs, and the subprime mortgages underpinning many of them, that proved to be O'Neal's downfall.

Dealing with the risky portfolio will be the priority of co-presidents and chief operating officers Ahmass Fakahany and Gregory Fleming. Merrill Lynch said their duties will be split -- with Fleming in charge of Merrill's front-line businesses, such as its brokerage.

Fakahany, a close confidant of O'Neal, will lead back-office functions such as finance and human resources.

O'Neal also resigned his board seat at investment manager BlackRock., in which Merrill owns a 49 percent stake. In addition to his separation package, Merrill will pay for office space and a secretary for three years -- and O'Neal will agree not to compete with Merrill for 18 months.

I wonder what he'll do with the $1.5 million remainder?

That'll pay a lot of extra cheese on my Burger King Whopper.

This is just ........ astonishing.


Why is it more beneficial to get fired than it is to keep your job?

or

You can lose a lot of people a lot of money and get paid very handsomely for doing so.

How come it never worked that way for me before?

quote:

How come it never worked that way for me before?

Word. I lost a job once, and couldn't even collect unemployment.

Hmmmmmmmmmm now maybe he'll start his own brokerage firm.

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A $160,000,000 severance package? Cool!

Hell yea! That is waaay cool! I can't even be mad at the brother for getting fired. That was a win win situation for him.