Stanley O'Neal
Encyclopedia
Earnest Stanley O'Neal is an American business executive. He is the former President, Chief Executive Officer
and Chairman of the Board of Merrill Lynch & Co. Inc.
, having served in numerous senior management positions at the company prior to this appointment. O'Neal was one of the first African-Americans to rise to the top on Wall Street. He has taken criticism for his performance during his reign as chief executive at Merrill Lynch, and the deterioration of the firm's stability and capital position. During the final hearings prior to the Bank of America
merger, numerous people - including a founder's son, Win Smith - laid the blame on O'Neal for the firm's downfall and loss of independence.
O'Neal was a member of the board of directors
of General Motors from 2001 through 2006. He currently serves on the board of Alcoa
.
to Atlanta, where he worked on a General Motors assembly line
. Stan O'Neal also worked briefly on GM's assembly line as a teenager under a work-study program offered by the General Motors Institute (later known as Kettering University
), where he gained a degree in industrial administration in 1974. GM later provided O'Neal a scholarship to attend Harvard Business School
, where he attained his MBA in 1978 and later rejoined GM as a Treasury Analyst.
. By 2003, he was CEO and chairman. He was one of the first African Americans to hold such a high position on Wall Street. O'Neal earned $48 million in 2006 and $46 million in 2007.
When he came to power, he attempted to get rid of the 'Mother Merrill' culture of job security, arguing that it promoted cronyism instead of merit. He also wanted to transform Merrill into a trading powerhouse, and beat Goldman Sachs at its own game. He promoted loyalists like Osman Semerci, who shared his vision. The new team plowed into the mortgage-backed CDO market on a massive scale; Merrill was one of the top CDO underwriters of the boom era. People who complained about risk were fired or sidelined. Initially this plan brought huge bonuses to Merrill, but when the market turned, trouble brewed.
During August and September 2007, as the sub-prime crisis swept through the global financial market, Merrill Lynch announced losses of $8 billion. O'Neal realized that he had steered Merrill Lynch into the disastrous sub-prime arena, and was responsible for the losses. As the crisis worsened, O'Neal approached Wachovia Bank about a possible merger, without first obtaining the approval of Merrill's Board of Directors, which led to his ouster. O'Neal walked away with a golden parachute compensation package that included Merrill stock and options valued at $161.5 million at the time. The board hired John Thain
to replace O'Neal, believing that he could save the business. A year later, he did the same thing O'Neal had planned to do; sold the company. This time, though, it was for a much lower price, and he sold it to Bank of America
.
On January 18, 2008, O'Neal was named to the board of directors of Alcoa.
O'Neal is said to have an "abrasive" personality. CNBC includes O'Neal in their list of "Worst American CEOs of All Time". When Thain arrived at Merrill he scrapped O'Neal's practice of having the security guards always hold an entire elevator bank open excusively for him. In The New York Times Magazine on April 18, 2010, O'Neal was described as one of the "feckless dolts" who helped precipitate the financial crisis of 2007.
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
and Chairman of the Board of Merrill Lynch & Co. Inc.
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, having served in numerous senior management positions at the company prior to this appointment. O'Neal was one of the first African-Americans to rise to the top on Wall Street. He has taken criticism for his performance during his reign as chief executive at Merrill Lynch, and the deterioration of the firm's stability and capital position. During the final hearings prior to the Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
merger, numerous people - including a founder's son, Win Smith - laid the blame on O'Neal for the firm's downfall and loss of independence.
O'Neal was a member of the board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of General Motors from 2001 through 2006. He currently serves on the board of Alcoa
Alcoa
Alcoa Inc. is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries...
.
College years
O'Neal's father moved his family from Wedowee, AlabamaWedowee, Alabama
Wedowee is a town in Randolph County, Alabama, United States. At the 2000 census the population was 818. The city is the county seat of Randolph County.-History:...
to Atlanta, where he worked on a General Motors assembly line
Assembly line
An assembly line is a manufacturing process in which parts are added to a product in a sequential manner using optimally planned logistics to create a finished product much faster than with handcrafting-type methods...
. Stan O'Neal also worked briefly on GM's assembly line as a teenager under a work-study program offered by the General Motors Institute (later known as Kettering University
Kettering University
Kettering University is a university in Flint, Michigan, offering degrees in engineering, math, science, and business. The campus is located along the Flint River on property that used to be the main manufacturing location for General Motors...
), where he gained a degree in industrial administration in 1974. GM later provided O'Neal a scholarship to attend Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, where he attained his MBA in 1978 and later rejoined GM as a Treasury Analyst.
Professional life
O'Neal initially worked as an analyst for General Motors; within two years he was a director in the treasury division. In 1986, he joined Merrill Lynch and by the early 1990s, he was running Merrill's leveraged finance division. After spells as global head of capital markets and co-head of the corporate and institutional client group, he spent two years as CFO from 1998 to 2000. In 2000, he was appointed president of the U.S. Private Client Group, the first executive of the division that oversees Merrill's brokerage who had not himself been a broker. O'Neal led massive layoffs within the division. He became president of the firm in 2001 in a palace intrigue that eventually led to the early ouster of his predecessor and one-time mentor David KomanskyDavid Komansky
David H. Komansky is the former chairman and CEO of Merrill Lynch & Company.Komansky grew up in a family of Russian Jewish immigrants and Irish Catholics. He joined the U.S. Coast Guard before getting a degree from the University of Miami in 1965...
. By 2003, he was CEO and chairman. He was one of the first African Americans to hold such a high position on Wall Street. O'Neal earned $48 million in 2006 and $46 million in 2007.
When he came to power, he attempted to get rid of the 'Mother Merrill' culture of job security, arguing that it promoted cronyism instead of merit. He also wanted to transform Merrill into a trading powerhouse, and beat Goldman Sachs at its own game. He promoted loyalists like Osman Semerci, who shared his vision. The new team plowed into the mortgage-backed CDO market on a massive scale; Merrill was one of the top CDO underwriters of the boom era. People who complained about risk were fired or sidelined. Initially this plan brought huge bonuses to Merrill, but when the market turned, trouble brewed.
During August and September 2007, as the sub-prime crisis swept through the global financial market, Merrill Lynch announced losses of $8 billion. O'Neal realized that he had steered Merrill Lynch into the disastrous sub-prime arena, and was responsible for the losses. As the crisis worsened, O'Neal approached Wachovia Bank about a possible merger, without first obtaining the approval of Merrill's Board of Directors, which led to his ouster. O'Neal walked away with a golden parachute compensation package that included Merrill stock and options valued at $161.5 million at the time. The board hired John Thain
John Thain
John Alexander Thain is an American businessman, investment banker, and currently chairman and CEO of the CIT Group.Thain was the last chairman and chief executive officer of Merrill Lynch before its merger with Bank of America...
to replace O'Neal, believing that he could save the business. A year later, he did the same thing O'Neal had planned to do; sold the company. This time, though, it was for a much lower price, and he sold it to Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
.
On January 18, 2008, O'Neal was named to the board of directors of Alcoa.
O'Neal is said to have an "abrasive" personality. CNBC includes O'Neal in their list of "Worst American CEOs of All Time". When Thain arrived at Merrill he scrapped O'Neal's practice of having the security guards always hold an entire elevator bank open excusively for him. In The New York Times Magazine on April 18, 2010, O'Neal was described as one of the "feckless dolts" who helped precipitate the financial crisis of 2007.
External links
- "Blundering Herd" by Bethany McLean and Joe Nocera, Nov 2010 Vanity Fair pg 179
- John Cassidy, "Subprime Suspect," The New Yorker, March 31, 2008 (detailed online abstract)
- Harvard Business School Bulletin profile