Big payday for exiting Merrill Lynch CEO

Steve Henn Oct 29, 2007

TEXT OF STORY

Scott Jagow: There’s a good chance the CEO of Merrill Lynch will resign this morning — or be fired. Stan O’Neal would become the highest-ranking job casualty of this Wall Street credit mess.

Last week, Merrill Lynch turned in the biggest quarterly loss of its 93-year history, thanks to bad investments in mortgage-backed securities called SIVs. So, O’Neal’s gonna pay the price for that. Kind of. Here’s Steve Henn.


Steve Henn: It’s good to be king, but it may be even better to be the deposed CEO of a big Wall Street investment house.

Stanley O’Neal wiped out billions of dollars in shareholder equity and then began negotiations for a major merger with a rival bank without first getting the go-ahead from his board of directors.

Nonetheless, O’Neal could be on the verge of a big, fat payday.

James Reda: He’s gonna walk away with about $150 million.

Minimum.

James Reda runs a compensation consulting firm, and analyzed O’Neal’s contract. Reda says Merrill’s board could also allow O’Neal to keep his stock options.

Reda: That could be worth $40 [million], $50 million right there.

O’Neal took home $48 million last year — which means getting canned could triple or even quadruple his income.

In Washington, I’m Steve Henn for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.