Merrill Lynch Begins CEO Search
RENEE MONTAGNE, host:
A day after it ousted CEO Stan O'Neal, Merrill Lynch is on the hunt for a new chief executive.
NPR's Anthony Brooks reports.
ANTHONY BROOKS: Stan O'Neal is the most prominent casualty to date in the subprime mortgage meltdown. O'Neal faced fierce criticism and was ousted after the company reported record third quarter losses of more than $2 billion and an $8 billion write-down for failed mortgage-related investments.
The question now is who will succeed him. Speculation has focused on Laurence Fink, the CEO of Blackrock, and Robert McCann who heads Merrill's brokerage division.
Joseph Bower, a professor at the Harvard Business School, says Merrill should choose a leader from inside the company.
Professor JOSEPH BOWER (Harvard Business School): An outsider has a tremendous disadvantage in not really knowing how the place works. It takes a lot of time to really begin to understand what needs to be done and who the people are who are going to do it.
BROOKS: Whoever it is, Jeffrey Sonnenfield of the Yale School of Management says the next CEO will face the daunting task of understanding and cleaning up Merrill's investments in subprime mortgages and other risky debt.
Mr. JEFFREY SONNENFIELD (Yale School of Management): They want to get the full truth, get it all out there and get it out there quickly to try to get it behind them, to not have it trickle out, not be very corrosive.
BROOKS: Some analysts predict that Merrill will face another $4 billion write-down in the fourth quarter, this on top of the already record losses last quarter.
Anthony Brooks, NPR News, Boston.
MONTAGNE: And we should note that Stan O'Neal walks away with an exit package worth more than a $161 million dollars. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.