to the CEO’s seat will be significant for two reasons. First, he would have done it without ever having made a cold call or mapping out a retirement plan-ascending through the brokerage ranks as all previous Merrill Lynch chairmen have done. Second, if selected, he would become only the third African American-behind Fannie Mae CEO Franklin Raines and American Express CEO-to-be Kenneth Chenault-to be named head of a Fortune 500 U.S. financial services firm. His coronation would give him control of an empire that manages trillions of dollars, and a potential salary of at least $20 million annually.
But before assuming the top spot, O’Neal must tackle a myriad of competitive challenges in the escalating brokerage wars. Even though second-quarter earnings of $902 million were 34% higher than last year’s numbers, the increase stemmed from gains in investment banking, higher profits from trading, and rising money management fees. Merrill’s brokerage commissions and trading profits dropped more than 20% from last quarter’s. And new asset inflows into Merrill’s customer accounts dipped to $18 billion from $59 billion. (The drop was partially due to investors selling stock to pay taxes.)
Against this backdrop, the high-powered executive’s charge includes restructuring brokerage operations and bolstering online service-an area besieged by a bevy of nimble competitors.
A skilled manager who effectively allocates resources and garners trust among his colleagues, O’Neal is more than up to the fight. Because of his stellar corporate performance and latest achievement, we toast Earnest Stanley O’Neal as the 2000 black enterprise corporate executive of the year.
Who’s the Man?
Standing about six feet tall, Stan O’Neal’s presence is hard to ignore but far from overbearing. Upon first meeting him, his boyish smile and warm greeting, accompanied by a firm handshake, quickly assuage any anxieties. He has a trim physique (he works out religiously five days a week), a smooth, honey-bronze complexion, and neatly trimmed salt-and-pepper wavy hair. He chooses a small conference room adjacent to his sprawling office space to share his story. The cadence of his speech is even; the tone low-key: he talks with you, not at you. In both speech and mannerism, he exudes an air of calmness and confidence.
To fully understand and appreciate O’Neal’s remarkable career, you must go back to where it all began-Wedowee, a tiny, rural, farming town approximately 85 miles from Birmingham. It was here that O’Neal, along with his two brothers and a sister, learned the power and importance of relationships-a trait that has served him well in his career at Merrill.
“I have a very big, tight-knit family. My world was always filled with cousins, aunts, and uncles. We all socialized together and celebrated holidays together. That’s what I remember most about growing up,” he says.
The frequent fellowship overshadowed the fact that the O’Neals didn’t have much. Their house was without indoor plumbing and they didn’t own a car. In fact, O’Neal spent his elementary school years in a one-room schoolhouse-with a wood-burning stove and one teacher for six grades-located a mile from his family’s farm.