Merrill Shareholders Turn Thumbs Down on Chair-CEO Split

April 23, 2004 ( - Despite a recent trend of several large U.S. companies splitting the roles of chairman and chief executive officer, shareholders at Merrill Lynch & Co. decided against taking a similar path.

The number one U.S. brokerage house announced that a shareholder proposal to split the two top posts failed at its annual meeting Friday, leaving CEO and Chairman Stanley O’Neal firmly in control.

The meeting, at Merrill’s campus in Plainsboro, New Jersey, marked one year since O’Neal, 52, took over as chairman from longtime chief David Komansky . O’Neal became Merrill’s president in July 2001 and added the CEO title in December 2002. By then, he had already launched a dramatic restructuring that included thousands of job cuts and the sale of Merrill assets overseas.

The issue of separating the jobs of chairman and CEO has become a more often raised corporate governance issue among reformers who contend that shareholders would be better served by having two separate points of view at the top of their companies. Leaving both posts to a single person is an invitation to conflicts of interest, the reformers argue.

Citigroup Inc. the world’s largest financial services company, split the roles last October, while Bank of America Corp. the number two U.S. bank, did the same earlier this month as a result of its purchase of FleetBoston. Walt Disney Co. separated the jobs in March after a contentious annual meeting at which chief Michael Eisner was slapped with a 43% protest vote (See  Eisner Protest Vote Reaches 43% ).