Remember when people used to just get fired?
It was reported today that Merrill Lynch CEO Stan O'Neal will 'retire' from the company after taking the blame for billions of dollars of write offs for bad debt investments in the subprime market. And that's just in the third quarter. It's expected that another several billion will have to be written off in the 4th quarter. O'Neal's backers will say he turned the company around after 2001 and built ML to a powerhouse. Of course, he cut 20,000 jobs in order to do it, but those are just details.
So what does Mr. O'Neal get for admittedly running the company into financial strain, putting 20,000 people out of work, and losing money for millions of investors? Only about $200 million in severance. The ML board was so mad at him for talking to Wachovia about a potential merger that they wrote him a big fat check and took his key to the executive bathroom. Wow, they sure showed him.
All this does for Merrill Lynch is what it did for Home Depot when Nardelli took his millions and left the fledgling company - give it a credibility black eye. If you're a ML client that just lost a chunk of your savings on O'Neal's gamble, wouldn't you be a little upset that you are left with nothing and he walks away with $200 million? What kind of message does that send to ML stakeholders? It's a clear one - customers and clients are not priority number one.
So what does Mr. O'Neal get for admittedly running the company into financial strain, putting 20,000 people out of work, and losing money for millions of investors? Only about $200 million in severance. The ML board was so mad at him for talking to Wachovia about a potential merger that they wrote him a big fat check and took his key to the executive bathroom. Wow, they sure showed him.
All this does for Merrill Lynch is what it did for Home Depot when Nardelli took his millions and left the fledgling company - give it a credibility black eye. If you're a ML client that just lost a chunk of your savings on O'Neal's gamble, wouldn't you be a little upset that you are left with nothing and he walks away with $200 million? What kind of message does that send to ML stakeholders? It's a clear one - customers and clients are not priority number one.
posted by Rob Amberg at
Tuesday, October 30, 2007
2 Comments:
Mr. Amberg,
Please make sure to check your facts. O'Neal, as a matter of fact, received NO severance package from ML. The "$200 million in severance" you claim is factually inaccurate. O'Neal WILL walk away with about $160 million in retirement and and stock options, both of which have been accumulated during his 21 year tenure at ML and his 5 years as CEO.
However, you are correct in stating that ML will be taking away O'Neal's bathroom key.
By
Anonymous, at Tuesday, October 30, 2007 9:24:00 AM
You're right, it isn't listed as 'severance.' The story refers to it as an 'exit package.' My mistake.
By
Rob Amberg, at Tuesday, October 30, 2007 9:41:00 AM
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