Who says people can't change? After spending the last two years muscling out senior executives, Merrill Lynch Chairman and CEO Stan O'Neal did something radically different on Aug. 12: He hired someone. Only five months after leaving Merrill, Robert McCann, 45, rejoined the company as vice-chairman.
In a newly created position, McCann will oversee Merrill's massive retail brokerage operations, asset management, and research. He'll report directly to O'Neal.
Already some see McCann as a potential future president of the world's largest brokerage, though he says the possibility wasn't discussed with O'Neal. The CEO told employees in an internal broadcast on Aug. 12 that he has informed the board of directors that he won't select a president for at least five years.
"Stan has been very open and direct on the fact that he's going to be president as well as chairman and CEO. I don't expect that to change any time soon," McCann said in an interview with BusinessWeek Online. "Frankly, I think this speculation distracts people from business and clients, and that's what I want to focus on."
McCann was one of a herd of senior managers who left Merrill after being sidelined by a tightly knit group of executives bent on running things their way. The group consisted of O'Neal, Chief Financial Officer Ahmass Fakahany, Vice-Chairman Thomas Patrick, and head of investment banking Arshad Zakaria.
Patrick recently left in a shakeup, after lobbying unsuccessfully for Zakaria to be the firm's next president. O'Neal had said he wanted to leave his former job open. Now, Zakaria is also heading for the exit. On Aug. 6, the 41-year-old exec announced that he would retire by the end of the year. And the board member who helped O'Neal get his job as president, former Schering-Plough (SGP ) Chairman Robert Luciano, is also being watched closely because of his strong ties with Patrick.
UP FROM THE RANKS.
With McCann's appointment, O'Neal appears to be addressing concerns about a lack of experience at the top of Merrill, following the slew of senior departures. McCann is a 21-year Merrill veteran who rose through the ranks to become the chief operating officer of investment banking until Zakaria became a co-head. Then McCann became head of research.
"If he does this successfully, he will be very well positioned [to be president]," says a former senior executive. McCann is widely considered a "people person" -- and that may be just what Merrill needs right now.
By Emily Thornton in New York
Edited by Douglas Harbrecht