Merrill Lynch CEO David Komansky said that he plans to step down from the top job at the firm before retiring in 2004, a move that will allow President Stanley O'Neal to take full control of the company. Komansky made the comments Tuesday at a Credit Suisse First Boston conference.
A transcript of Komansky's presentation does not include comments about relinquishing the CEO title, but sources at the conference in Laguna Niguel, Calif. confirm that Komansky made the statement. A firm spokesperson has not returned phone calls confirming the statement. A replay of the presentation will be available on Merrill's Web site today.
O'Neal has already taken the helm at Merrill, guiding it through the past year’s troubled times and into an uncertain future. O’Neal, 50, has led an effort to improve Merrill’s profitability and return on equity by eliminating thousands of jobs, and selling some of its international brokerage operations and closing others.
Last week, O'Neal established an operating committee of top executives that did not include Komansky, increasing speculation that the firm’s CEO would be leaving. The nine-member group led by O'Neal will “address critical strategic and business operating issues,'' according to an internal memo from O'Neal and Komansky.
At the CSFB conference, Komansky talked about Merrill's restructuring and growth plans. The speech was similar to one O'Neal gave two weeks ago at Salomon Smith Barney’s conference in New York in which he talked about Merrill’s future, the emphasis on creating more broker teams and the unveiling of a new “cultural” formula that will help guide the firm into the future.
O’Neal said at the conference that Merrill has been able to “achieve efficiency” by closing 100 unprofitable offices yet retaining 75 percent of the financial advisors and 90 percent of the assets associated with those offices.
He also says that of Merrill’s 14,000 brokers, a third are in teams, and some have emerged as “exclusive” high-net-worth advisor teams for the firm’s new Private Wealth Management offices.
Merrill’s $1.2 trillion in U.S. private client assets averages out to $90 million per broker, yet “many teams have well over a billion dollars,” O’Neal says. He also points out that the firm “enrolled a million accounts under $100,000 in our Financial Advisory Center,” in 2001. He says he expects that progress to continue, but at a “slower pace” because of the economic environment.