So let me get this straight… He get’s $159 million for leaving Merrill today and - would have got - $250 million if the deal with Wachovia had gone through? …I guess Harvard B-School really is worth more than a CFA? Willy
He was a star at GM before HBS…
I don’t think he was making nine figures in the GM treasury though. Ultimately he was a pretty bad executive. Great personal story though.
Ultimately he was a pretty bad executive. - that would be an understatement.
$160 Mil is not a bad take for someone that came in, cost cut his way to better profits (with no real growth strategy), blew up the company and then rolled right out again… Good job Stan! If someone would just give me a chance, I could assume the role of CEO and destroy value and morale too. Probably in less time, and I’d do it for half the pay package…
Bodymore Wrote: ------------------------------------------------------- > $160 Mil is not a bad take for someone that came > in, cost cut his way to better profits (with no > real growth strategy), blew up the company and > then rolled right out again… > > Good job Stan! > > If someone would just give me a chance, I could > assume the role of CEO and destroy value and > morale too. Probably in less time, and I’d do it > for half the pay package… I will be more than happy to do the same thing for a quarter of the pay-package.
I’d do it for free *evil laugh*
Bodymore Wrote: ------------------------------------------------------- > $160 Mil is not a bad take for someone that came > in, cost cut his way to better profits (with no > real growth strategy), blew up the company and > then rolled right out again… > > Good job Stan! > > If someone would just give me a chance, I could > assume the role of CEO and destroy value and > morale too. Probably in less time, and I’d do it > for half the pay package… I’m no fan of the way he ran MER but that is a horrible analysis of his tenure as CEO. He had a very clear growth strategy that should be pretty easy for anyone to see. Problem was it was flawed.
alot of it was in deferred comp no? Also pre-subprime, he helped revive their stock.
He got NOTHING new for leaving. What he did get is automatic vesting of his stock/options that were awarded in previous years because he is retiring (as long as he doesn’t go to a competitor).
commstudent Wrote: ------------------------------------------------------- > I’d do it for free *evil laugh* lolol You have to love the golden parachutes on the street. “Never have so many been paid for contributing so little.”
Sure, he helped revive the stock. He took over in 2002 and given the market environment during his tenure a monkey with a wiffel ball bat could have done the same thing… And Big Nodge, I disagee, cost cutting and/or trying to shadow GS is not a growth strategy.
Sure, he helped revive the stock. He took over in 2002 and given the market environment during his tenure a monkey with a wiffel ball bat could have done the same thing…- well put, +1
I’m not going to defend him as I despise this management team, I just think your take on why he was a bad CEO is off the mark. He pushed them aggressively into new products and really changed the make-up of MER’s business. They became the market-leader in CDOs, drastically expanded their prop trading, and pushed hard into private equity and leveraged lending. He came in with the idea that the culture and business focus of MER were wrong, and he worked quickly to change that. He did trim a lot of fat but the top line was as big a contributor to profits as the cost saves. He was a bad executive, however, because he pursued this strategy blindly without instituting proper controls. He increased the risk appetite of the firm without developing the appropriate risk culture. You have a point that he did try to mimic GS (can you blame him?), but he didn’t take into consideration that GS lives and breathes risk management. MER didn’t even have a chief risk officer until a few weeks ago. On the personality side, Stan surrounded himself with yes-men and had a tendency to eat his young. After getting the top job he purged many long-standing MER executives, including his former mentors. Up-and-coming business leaders who seemed to disagree with his thinking or have the potential to challenge his rule were cast out quickly. He didn’t believe in collaborating with his business unit heads and preferred to make decisions on his own as opposed to reaching a consensus through discussion. He assembled a weak board of directors who were loyal to him (he thought). Clearly, approaching WB without talking to the board shows just how much control he thought he had over them. As to the $160MM, it seems excessive but that was in the contract. The only way to avoid paying it out would be to find a way to fire him with cause. That would result in a lengthy court case with likely countersuits from Stan against the board and the firm. MER does not need a drawn-out legal battle at this point, so paying up is probably the lesser of two evils.
Big Nodge you make very good points, in a well articulated response I might add. Either way, I agree that $160mm is VERY excessive but probably unavoidable for the reasons you stated. The funny/interesting thing is that MER might end up right back where it started (Mother Merrill).
Stan >>> Bob (Nardelli)
Thanks. It’s interesting, a piece just hit the tape on Stan that brings up a fairly good point (Brad Hintz from Bernstein if any of you are clients), one that is overlooked in the current media buzz. Basically, Stan loved MER, and by taking responsibility for the CDO disaster on the call last week he essentially sealed his own fate and willingly fell on his sword. He certainly could have fired Edwards (CFO) and tried to prolong his reign. Even though it won’t change my opinion of him as a CEO, you can respect him for how he went out. Of course $160MM will help ease the sting, but at the same time I really believe once you are that rich legacy become just as important as money, if not more so.
I’m totally understanding of the way the pay out is calculated and for sure part of it has to be the present value of a non-compete clause but still, it hurts to be a loathly Portfolio Manager having to always come up with new and innovative ways to validate the performance of my funds quarter-after-quarter to Advisors who are basically sales jockies and who have 1/50th the education or experience that I do but - many of whom - top my pay day…any day. I just think to myself, $160MM could change my life because I could help so many people. I’d basically donate $100MM of it right off the bat. I mean come on, you’re telling me $50 million wouldn’t last me and everyone I know three lifetimes if i managed it properly? Willy
^ Yeah, it’s very good for a Headhunter. Willy, call me on my cell next time so I can take it outside, not on the land line. I can’t be talking with HHs on the floor.
Bodymore Wrote: ------------------------------------------------------- > Big Nodge you make very good points, in a well > articulated response I might add. Either way, I > agree that $160mm is VERY excessive but probably > unavoidable for the reasons you stated. The > funny/interesting thing is that MER might end up > right back where it started (Mother Merrill). So much mixed feeling about those two words (Mother Merrill)!!!