E. Stanley O’Neal, who grew up in rural Alabama and worked as a foreman at a General Motors plant, was yesterday put in line to become the first African American to lead a major Wall Street firm.
O’Neal was named president and chief operating officer at Merrill Lynch, the firm announced – putting an end to a hard-fought, three-way horse race to take over the nation’s biggest stock brokerage firm.
The Post reported exclusively yesterday that O’Neal, 49, would get the post and be made heir apparent to Chairman and CEO David Komansky.
Merrill shares slipped $1.26 to close at $52.11.
Left back in the pack after Merrill’s board unanimously approved O’Neal’s appointment are Jeffrey Peek, 54, head of the firm’s asset management group, and Thomas Davis, 47, head of the firm’s corporate and institutional client group.
Peek, who had been credited with turning around the firm’s asset management business, had been seen as the greatest challenge to O’Neal’s ascension.
Over the past two days, Komansky met with each of the contenders and notified them of his decision to recommend O’Neal.
Addressing the Merrill board shortly following his appointment on Monday, O’Neal said that he was “honored” and “elated” by its decision.
Although O’Neal’s successor for the retail brokerage has not yet been named, James Gorman, a former McKinsey & Co. consultant and O’Neal’s No. 2, is viewed as the most likely contender.
O’Neal’s appointment will make him the first-ever non-stock jockey to lead the “thundering herd,” as Merrill has been known for years because of its legions of stock brokers.
Some were not surprised that O’Neal won the race. When Merrill’s revenues were plummeting, O’Neal stepped up to the plate and initiated cost-cutting – which included layoffs – to try to salvage profitability.
Some say he was chosen because he was unafraid to make big cuts and execute tough decisions.
O’Neal spent his first 13 years in a rural farm community in Alabama. His family moved to Atlanta when O’Neal was 13, and his father worked on an assembly line for GM.
After high school, O’Neal alternated work and school semesters, and after earning a bachelor’s degree in science, took a job as a foreman in the GM factory, overseeing 50 people in Georgia. By the time he left GM for Harvard Business School, O’Neal was managing 250 people and had risen to general foreman.
O’Neal graduated from Harvard with distinction in 1978 and took a job in the GM’s treasurer’s office, working in international finance for two years in Spain. He then returned to the treasurer’s office in New York.