Whilst anyone who walks away with $159mn for running up an $8.4bn loss on his watch deserves little sympathy, I struggle with the idea of replacing Stan O’Neill with one of his deputies. After all at least one of them would have had the head of risk management reporting directly to them; and therefore are probably as culpable as O’Neill for the losses incurred.
O’Neill was a member of the cult of the CEO, which is perpetuated throughout investment banking at every level*, and therefore deserved to go but the responsibility runs deeper through the organization than one man and replacing him with a direct report is making a change for changes sake. Here’s hoping some shareholders find a spine and challenge both the new leadership and the payout.
* Epitomized by investment bankers who “did” an IPO. Actually the business did the IPO – you were facilitators, middlemen, overpaid traffic police.
Technorati Tags: Management, Merrill, Investment Bankers
I too was amazed by the O’Neill payout for such terrible performance.