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Merrill Lynch appoints new boss Merrill Lynch appoints new boss
(about 10 hours later)
Merrill Lynch has appointed the boss of the New York Stock Exchange, John Thain, to be its new chief executive.Merrill Lynch has appointed the boss of the New York Stock Exchange, John Thain, to be its new chief executive.
He replaces Stan O'Neal, who left after the bank was forced to admit a $7.9bn exposure to bad mortgage debt.He replaces Stan O'Neal, who left after the bank was forced to admit a $7.9bn exposure to bad mortgage debt.
Merrill Lynch shares rose by as much as 7% as newspapers reported that the appointment was about to be made. Merrill Lynch shares rose by as much as 7% as newspapers reported the likely appointment and closed up nearly 2%.
Earlier in the day, the bank said that it had not offered the job to Larry Fink, chief executive of the investment bank BlackRock. Before confirmation of his appointment, the bank said it had not offered the job to Larry Fink, chief executive of the investment bank BlackRock.
Mr Fink had previously been thought to be the frontrunner for the job, but he was reported to have only been prepared to take the job if the bank could give him full accounting for its exposure to sub-prime mortgage debt.Mr Fink had previously been thought to be the frontrunner for the job, but he was reported to have only been prepared to take the job if the bank could give him full accounting for its exposure to sub-prime mortgage debt.
The share price rise suggested that investors supported Mr Thain's appointment. Balance
"We believe he would be a very good team builder and unifier, as well as operator," said David Katz from Matrix Asset Advisors in New York. He understands both the company's challenges and, as his track record shows, he appreciates the value of the Merrill global brand Alberto Cribiore, Merrill Lynch interim chairman
Merrill Lynch said that 52-year old Mr Thain - who becomes the first chief executive to be appointed from outside the business in its 93-year history - was the "right person" for the job.
"John will be adept at balancing the focus on risk management and controls while taking the steps necessary to ensure the company evolves and grows," said Alberto Cribiore, the Merrill Lynch director who headed the search.
"He understands both the company's challenges and, as his track record shows, he appreciates the value of the Merrill global brand."
In accepting the job, Mr Thain did not comment on the firm's recent problems, only saying that he was "excited and honoured" to be taking the helm of the business.
But the share price rise suggested that investors supported Mr Thain's appointment.
'Good operator'
Merrill Lynch's shares have been weak since the firm disclosed larger-than-anticipated losses from mortgage-backed investments, a revelation which effectively led to Mr O'Neal's departure.
JOHN THAIN BIOGRAPHY 2004-2007: New York Stock Exchange chief executive1999-2004: President, chief operating officer, Goldman Sachs1994-1999: Chief financial officer, Goldman Sachs1995-1997: Chief executive, Goldman Sachs Europe
"We believe he would be a very good team builder and unifier, as well as operator," David Katz, from Matrix Asset Advisors, in New York, said of the appointment.
"We look at this as a home run for Merrill," he added."We look at this as a home run for Merrill," he added.
Mr Thain was co-president of Goldman Sachs until 2004 when he left to become chief executive of NYSE Euronext. A Harvard graduate, Mr Thain was co-president of Goldman Sachs until 2004 when he left to become chief executive of NYSE Euronext.
The NYSE has announced that Duncan Niederauer will replace Mr Thain as its chief executive.The NYSE has announced that Duncan Niederauer will replace Mr Thain as its chief executive.