(May 26) – “Three months after taking over Merrill Lynch & Co.’s brokerage operations, E. Stanley O’Neal has shaken up its management team, bringing in a deputy who put the bull back in the firm’s advertising,” writes Patrick McGeehan in today’s New York Times.
“O’Neal, the first person not a stockbroker to run the nation’s largest brokerage network, has named another nonbroker, James Gorman, to be the No. 2 executive, people inside the firm said. He also moved a few executives out of top jobs and promoted several others as part of a reorganization of the unit, those people said.”
“A Merrill spokesman declined to discuss the changes because they had not been announced to the firm’s brokers. “
“The changes were anxiously anticipated by Merrill’s 14,200 brokers, who knew little about O’Neal when he was promoted from chief financial officer to succeed John L. Steffens, the longtime head of the firm’s brokerage business, in February. As O’Neal made the rounds, meeting managers and top brokers around the country, rumors swirled about how he might reshuffle the troops.”
“So far, the biggest surprise is the luring of Gorman, a former consultant with McKinsey & Co., who has been Merrill’s chief marketing officer. Gorman essentially will serve as the chief operating officer of the brokerage operations and would be next in line for O’Neal’s job, said a person who knows him.”
“O’Neal, 48, is widely viewed within the firm as most likely to succeed David H. Komansky as Merrill’s chief executive. If that happens soon, O’Neal could be the first black chief executive of a major Wall Street firm. Komansky, who, like his predecessors, worked his way up through the broker ranks, is scheduled to retire in four years.”
“Like O’Neal, Gorman is highly regarded in Merrill’s boardroom. Most recently, he engineered an alliance between Merrill and HSBC Holdings, a London-based banking company, to set up online banking services in several countries in Europe and Asia. Before that, he revamped Merrill’s brand marketing, putting the bull and the image of bullishness back into Merrill’s ads after a hiatus of several years.”
“As part of the reorganization, O’Neal is grouping together all of Merrill’s direct dealings with customers, ranging from individual investors to owners of small businesses to pension plans. He also is renaming the brokerage network, now known as national sales, the advisory business to emphasize that the firm’s main service is to provide financial advice not to sell stocks and bonds. People who know O’Neal and Gorman say that they believe that the quality of their service will define financial services firms.”