This year Merrill Lynch & Co. (NYSE: MER) tossed out its CEO Stanley O'Neal. He made bank during his five years in the job -- to the tune of $319 million -- which as I posted includes the $160 million he got paid and the $159 million in retirement benefits. And in leaving he did not get a severance package. His biggest loss is the additional hundreds of million he might have made if he had stayed in the job.
I thought O'Neal was destined to depart when he started writing down mortgages. His two biggest "crimes" were:
- No friends. The ruthlessness he displayed in his climb to the top kept him from getting any protection from his board when he got into trouble. The unauthorized conversations he had with Wachovia Corp. (NYSE: WB) proved to be the straw that broke the back of Merrill's board's confidence in him.
- Goldman envy. As I posted this month, he kept pushing Merrill to be more like Goldman Sachs Group (NYSE: GS) by betting house money. O'Neal's Goldman envy reflected what he thought was a fundamental weakness at Merrill. But he played his mortgage-backed securities hand for too long -- and unlike Goldman -- he did not hedge that bet very well.
While I would enjoy having O'Neal's money problems, he will regret having lost his job at Merrill, unless he is able to land a better one in 2008.
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