As John Carney notes, it’s a
little bit weird that Merrill Lynch is now headless – and just as
the all-important bonus decisions are being made, too. Why no interim CEO? Carney
speculates that no one is willing to do the job with Sarbox hanging over his
head, especially if he was only going to stay in the position for a short amount
Under Sarbanes Oxley a new CEO would have to sign a written statement certifying
that the information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of the company.
That’s something a new chief executive might not feel comfortable doing.
So it seems that Merrill’s next CEO will be a permanent CEO. But here’s another
weird thing: shouldn’t it be obvious, by now, who the heir apparent is? After
all, O’Neal was ousted with surgical precision, according
to well-established rules. As Punk Ziegel’s Dick Bove writes:
"The process is to gather as much inside information as possible that
can be spun to negative and then feed the press with that informtion. This
is done by setting up a team who on a daily basis has no other goal but to
get rid of the CEO in favor of someone they think they can support."
The plotters clearly got rid of O’Neal – so where’s the candidate "they
think they can support"?
But it might be very hard to find anybody with the requisite degree of internal
support. For one thing, no one really knows if Merrill’s current valuation really
makes financial sense, which means that it will be hard to persuade an incoming
CEO to buy in at this price. But if he doesn’t, Merrill’s employees, loaded
up with stock options which are rapidly threatening to sink under water, won’t
be happy. Notes
Peter Eavis, on Jamie Dimon’s installation as CEO of Bank One:
Another important move that Dimon made was to buy nearly $60 million of Bank
One stock with his own money before joining the bank. If the new Merrill CEO
were to purchase a large slug of stock in the company before joining, it would
be a clever motivating gesture, causing employees to warm to the newcomer.
But I can’t imagine that anybody would want to take the regulatory risk and
the financial risk of doing something like that, not unless they were dynastically
wealthy to begin with. Are there any underemployed billionaires out there who
might be interested, and who are under the age of, say, 65?