Merrill Lynch, the world's largest brokerage, on Wednesday named two senior executives to the newly created post of co-president, adding them to the list of potential successors to Chief Executive Stan O'Neal.
Ahmass Fakahany, who had been vice chairman and chief administrative officer, and Greg Fleming, co-president of global markets and investment banking, will both report to O'Neal and oversee the company's operational activities.
A third senior executive, Dow Kim, who had been global markets and investment banking co-president along with Fleming, said he was leaving the firm by year-end to set up a multi-strategy hedge fund firm.
O'Neal decided to promote Fleming, 44, and the Egyptian-born Fakahany, 48, after Kim told the CEO about his intention to leave the company to start up his own firm, Merrill spokesman Jason Wright said.
"Dow is a brilliant trader who has no desire to run the company," Wright said. "He has been very public in letting that be known during his tenure."
The promotion adds Fakahany and Fleming to the list of potential successors to O'Neal, who is 56. Other candidates include Chief Financial Officer Jeff Edwards and Vice Chairman and President, Global Private Client, Robert McCann
Merrill expects to be an initial client of Kim's new firm, with specifics of their affiliation still under negotiation.
Kim, Merrill's second-highest paid executive last year, will be an advisor to its senior management for a transition period, the brokerage said.
Kim, 44, is the latest in a series of senior Wall Street executives who have struck out on their own, preferring to set up their own firms, whether they be small boutique investment banks or hedge fund managers.
He said in a statement that he had had "as a personal goal founding and running" his own firm.
"I don't think there ever will be a more opportune moment than now for me to explore how best to do so," he said.
Earlier this month, Bank of America Corp.'s <BAC.N> chief investment officer, Ian Banwell, resigned to launch a hedge fund firm in which the bank agreed to take a minority stake.
Kim was the second-highest paid executive at Merrill Lynch last year after O'Neal, receiving cash, stock and salary of $37 million. Fleming got compensation of $34 million, while Fakahany received $30 million.