Merrill Considered Naming O'Neal Interim Chairman
Not long after the Merrill Lynchboard of directors agreed to oust Stan O'Neal as the company's chief executive, the same board offered to allow O'Neal to remain in the post on an interim basis until a new chief executive can be found, according to a person briefed on the matter.
It is unclear if O'Neal accepted the offer, this person said, and as of late Sunday, O'Neal was was still weighing his options.
Sources close to the situation initially said that a member of the Merrill board would be named interim chairman.
The move underscores the difficult situation faced by Merrill's board as it attempts to maintain some leadership at a firm reeling from massive losses to due its exposure to risk bonds and a recent credit-rating downgrades.
Sources close to the firm say the board is leaning toward offering the CEO job to Larry Fink, the current CEO of BlackRock. Other internal candidates include Co-President Greg Fleming and the favorite of the firm's massive brokerage unit, Private Client Chief Robert McCann.
If O'Neal stays on even for a short time it will be controversial. It was, after all, his strategy of increasing risk, particularly in the fixed income area that resultedin a recent write down for the third quarter of $8.4 billion. Analysts expect a further write down in the fourth quarter.
Merrill shares surged 8.5 percent on Friday -- their biggest single day move in five years -- on reports that O'Neal, 56, would be replaced.
Members of Merrill's board apparently became angry when they learned O'Neal had floated a merger proposal with U.S. bank Wachovia without their knowledge, The New York Times reported on Friday.