Merrill Lynch’s board of directors has elected former retail chief Stan O’Neal as president and COO, putting him in line to one day lead the firm.

The appointment is effective immediately. O’Neal was also was elected to the firm’s board of directors..

O’Neal, 49, has served most recently as president of Merrill Lynch’s U.S. Private Client Group. Previously, he served as the corporation’s CFO and co-headed the Corporate and Institutional Client Group.

Speaking on behalf of the board, Merrill’s chairman and CEO, David Komansky said, “Through his broad experience across the many facets of our business, Stan O’Neal has demonstrated keen strategic vision and a great ability to inspire and lead people. His dedication to outstanding performance on behalf of our clients, shareholders and employees makes him the ideal person to join me in leading our company.”

In his new position, vacant since July 1999, O’Neal will work with Komansky to direct the worldwide operations of the company’s three primary businesses: corporate and institutional, private client and investment management. He will continue to head USPC until a successor is named. ” I am honored to take on this leadership role,” O’Neal said. “Merrill Lynch is an exceptional company with exceptional people. Together, we will build upon a long and impressive record of growth as one of the world’s premier brands in financial services.”

O’Neal joined Merrill Lynch as a director in investment banking in 1986. In 1991, he became managing director in charge of high-yield finance and restructuring and assumed added responsibilities in 1994 for real estate and project finance and equity private placement. In 1995, he became head of the capital-markets group, with responsibility for all debt and equity new issue activity worldwide. He became co-head of CICG in April 1997, at which time he was also elected an executive vice president. Eleven months later, in March 1998, he became CFO, a position he held until becoming president of USPC in February 2000.

O’Neal is a vice chairman of the Securities Industry Association, a member of the Capital Markets Advisory Committee of the New York Stock Exchange, and a director of the Nasdaq Stock Market. He serves on the boards of the National Urban League, Ronald McDonald House of New York, Catalyst and the Buckley School. He also serves on an advisory council to the Bronx Preparatory Charter School, a New York City public school that provides a college preparatory curriculum to low-income students.