NEW YORK (Reuters) - Top brokers at Merrill Lynch & Co Inc <MER.N> who oversee billions of dollars in client assets have urged the board to give more power to their boss, Robert McCann, who was sidelined under former CEO Stan O'Neal.
By Tim McLaughlin
NEW YORK (Reuters) - Top brokers at Merrill Lynch & Co Inc <MER.N> who oversee billions of dollars in client assets have urged the board to give more power to their boss, Robert McCann, who was sidelined under former CEO Stan O'Neal.
Twenty-one Merrill brokers recently wrote a letter to the board requesting that McCann, head of the global private client business, be considered as a president or co-president of the company. The brokers are from Merrill's Circle of Champions group, which recognizes the top producers among an army of about 16,000 brokers.
The board received the letter before naming NYSE Euronext <NYX.N> CEO John Thain last week as Merrill's new chairman and CEO. Thain's appointment was seen as a good move by investors, analysts and Merrill brokers because of his previous leadership roles at Goldman Sachs Group Inc <GS.N>.
!ADVERTISEMENT!Nevertheless, it has been several years since Merrill's brokerage division has had a representative at the top level of company management. The division has been a bright spot for Merrill, whose share price has been hammered amid a $2.3 billion loss in the third quarter, mostly because of bad bets on subprime mortgage-related assets.
Merrill brokers said rival firms have tried to capitalize on the turmoil by trying to recruit some of them. They also have had to calm jittery clients worried that their assets might be exposed to risky subprime mortgages.
"We recognize that the success of all the different businesses at Merrill Lynch is critical to our long-term success as a firm, but we believe the Private Client business represents the core of what the Merrill Lynch culture is all about," the brokers wrote in a letter obtained by Reuters. "We believe that a team effort at the highest executive level of the firm is required and that the Private Client business should be represented at the presidential level."
The letter-writing group is represented by top brokers throughout the United States and includes Mark Sear and David Hou, who left Goldman Sachs in the late 1990s to become two of Merrill's top producers in southern California. In 2005, for example, Barron's said the duo looked after $2 billion in client assets.
Merrill declined to comment on the letter.
McCann, 49, oversees Merrill's global wealth management group, which includes the brokerage division and nearly $2 trillion in client assets. In May, a reorganization severed McCann's direct reporting relationship to O'Neal while the company made star investment banker Greg Fleming and Ahmass Fakahany, a top finance and administrative executive, co-presidents.
Sources said the board interviewed McCann for the CEO post, and inside and outside the company there's speculation he ultimately could share power with Fleming.
McCann left Merrill in 2003 after 21 years at the company for AXA Financial during a period of exodus by several executives. But at the behest of O'Neal, he returned several months later to calm unrest in the brokerage ranks.
McCann previously was a Merrill representative in the industry-wide bailout of failed hedge fund Long-Term Capital Management. He later was tapped to clean up Merrill's research division after the 2001 investigation of the company's stock analysts by the New York Attorney General.
"There is no doubt in our minds, that if called upon, Bob McCann would be an outstanding leader of this firm," the letter said.
(Reporting by Tim McLaughlin, editing by Maureen Bavdek)
