Finding a New Merrill CEO

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

of time.

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?

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