Merrill Cuts CEO O'Neal's 2002 Pay by 33 Percent (Update2)
By Stephen Cohen
New York, March 14 (Bloomberg) -- Merrill Lynch & Co. cut Chief Executive Officer Stanley O'Neal's 2002 pay by a third to $14.3 million, the firm said in a filing with the Securities and Exchange Commission. Chairman David Komansky's compensation fell 11 percent to $14.4 million.
Komansky received $700,000 in salary, a $7 million cash bonus, restricted stock worth $4.8 million and stock options the firm valued at $1.9 million on their grant date. O'Neal received $500,000 in salary, a $7.2 million cash bonus, restricted stock worth $4.7 million and options valued at $1.9 million. In 2001, O'Neal's pay included a $9.4 million stock option grant rewarding his promotion to president.
Merrill's shares fell 27 percent in 2002. The stock outperformed rival Morgan Stanley and lagged Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos.
Merrill ``had a pretty good year if you look at their results considering what their rivals did,'' said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm. O'Neal's pay ``is about exactly where I thought it would be.''
The decline in O'Neal's and Komansky's pay compared with an increase for Bear Stearns Chief Executive Officer James Cayne and decreases for their counterparts at Morgan Stanley, Goldman Sachs, Citigroup Inc. and Lehman.
O'Neal, 51, became CEO in December and is expected to become chairman when Komansky retires next month. Komansky served as CEO until December and chairman for the last month of the year.
During 2002, Merrill eliminated 6,500 employees, bringing total job cuts to 21,700 since the third quarter of 2000. Merrill's 2002 profit quintupled to $2.6 billion compared with earnings of $573 million in 2001 as the firm cut expenses faster than revenue fell.
Other Executives
Thomas Patrick, who was promoted this year to executive vice chairman for finance and administration from chief financial officer, got an 8.8 percent raise to $10.3 million in 2002. In 2001, he was paid $9.5 million including deferred compensation for a so-called second-to-die life insurance policy. The firm didn't buy the policy because of the ``regulatory status of such a policy,'' it said in the filing.
Arshad Zakaria, who became the sole head of the firm's global markets and investment-banking business after Paul Roy resigned from the firm, got an 18 percent raise to $11.7 million.
James Gorman, head of Merrill's brokerage division, was paid $7.95 million in 2002, up 0.5 percent from 2001. In December 2002, he assumed responsibility for Merrill's combined U.S. and overseas brokerage businesses. Before then, he ran Merrill's U.S. brokerage division.
Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News. |
