# Stanley O'Neal

Earnest Stanley O'Neal, Jr. (Stan O'Neal, born October 7, 1951) is a retired American business executive. From 1986 to 2007, he worked for Merrill Lynch, an investment banking firm. In 2002, O'Neal was named chief executive officer of Merrill Lynch, the first Black CEO of a Wall Street firm. In 2003, he became chairman and CEO of Merrill Lynch, and was named one of the “25 Most Powerful People in Business” by Fortune magazine. In 2007, he was dismissed as Merrill Lynch's chairman because of the firm's underperformance during the global financial crisis.
As a director, O'Neal has served on the board of directors of Alcoa, Arconic, General Motors, and other corporations.

## Early life and education

E. Stanley "Stan" O'Neal was born in a Roanoke, Alabama hospital and raised in Wedowee, Alabama (population: 800). He was the eldest of four children of Earnest O’Neal, Sr., a farmer, and Ann Scales, a domestic. He grew up in a wood-frame house on his grandfather's three hundred acre farm. His grandfather, James Neal, died when Stan was five. As a child, Stan played with his sister, two brothers, and other family members on his grandfather's farm, "picking cotton and corn." He also sold and delivered newspapers.
When Stan was 12 year old, his family moved to Atlanta. His father worked on the assembly line at the General Motors (GM) factory in Doraville, Georgia, a suburb of Atlanta. Stan attended West Fulton High School.
For college, he enrolled in the General Motors Institute (GMI) (today known as Kettering University), and participated in a work-study program that allowed him to rotate between working at the GM Doraville plant and taking engineering and industrial administration classes at GMI. In 1974, he graduated from GMI with a bachelor's degree in industrial administration, the first person in his family to graduate from college.
After graduation, GM hired him as a supervisor at the Doraville plant. While working at the Doraville plant, O'Neal applied to Harvard Business School (HBS). He was accepted, and offered a GM merit-based scholarship. At HBS, he was one of a few Black students. He was elected vice president of the Afro-American Student Union. In 1978, he graduated with honors from HBS with a MBA in finance.

## Career

O'Neal began his career at General Motors. During his tenure at GM, he received several promotions. In 1981, he was appointed director of G.M.’s office in Madrid, Spain and supervised a team of thirty employees.

### Merrill Lynch

In 1986, O'Neal joined Merrill Lynch as director of investment banking. By the early 1990s, he was running Merrill's leveraged finance division.
In 1997, he was named executive vice president and co-head of Global Markets and Investment Banking. In 1998, he was appointed CFO. In 2000, he was appointed president of the U.S. Private Client Group, and oversaw 16,000 brokers in 800 branch offices. He was the first head of the private client group who had not previously been a broker at the firm, and led massive layoffs within the division. In 2001, O'Neal became president of the firm, which eventually led to the resignation of his predecessor and one-time mentor David Komansky.
On July 23, 2002, O'Neal was selected as CEO and chairman, the first Black CEO of a Wall Street firm. In his role, he dismissed Thomas H. Patrick, Sr., and Arshad R. Zakaria, two senior executives who played pivotal roles in O'Neal's promotion to CEO. O'Neal attempted to get rid of the 'Mother Merrill' culture of job security, arguing that it promoted cronyism instead of merit.
O'Neal wanted to transform Merrill into a trading powerhouse, and to surpass Goldman Sachs and other Wall Street firms. In 2006, he hired Osman Semerci as Global Head of Fixed Income, on the advice of trading and investment banking head Dow Kim and COO Ahmass Fakahany. Semerci continued Merrill's advances into the subprime mortgage-backed collateralized debt obligation (CDO) market, grew the firm's position from $5 to $6 billion worth of exposure to $55 billion in under one year, and fired trader Jeff Kronthal, who warned against too much exposure to CDOs. Merrill was one of the top CDO underwriters, and its executives received huge bonuses based on CDO performance. According to the then-president of Merrill, Greg Fleming, the dismissal of Kronthal in July 2006 was the day the firm's fate was sealed; in Fleming's opinion after Kronthal's firing Merrill was doomed to make the same mistakes as its competitors.
O'Neal was regarded as out of touch as the market changed and Merrill steered towards trouble, as he had "become isolated from his own firm. He had no idea that key risk managers had been pushed aside or that the people he had put in important positions were out of their depth". O'Neal was described as a manager who "had never been the kind of C.E.O. who walked the trading floor. By 2006, he was so divorced from his own firm that he failed to appreciate the utter lunacy of Semerci’s desire to clean house. Did he really think Semerci could get rid of Merrill’s most experienced mortgage traders and not harm the mortgage desk? Sadly, it seems that O’Neal didn’t think about it at all." "At the same time Goldman executives were canceling vacations to deal with the burgeoning subprime crisis, O’Neal was often on the golf course, "playing round after round by himself".
During August and September 2007, as the subprime mortgage crisis swept through the global financial market, Merrill Lynch announced losses of $8 billion. O'Neal finally realized the huge exposure that Merrill had to subprime mortgage-backed CDOs, and that the firm would have to be sold in order to survive. As the crisis worsened, O'Neal made an unauthorized approach to Bank of America and Wachovia Bank about a possible merger, which played a role in his ouster. On October 30, 2007, O'Neal resigned as CEO. He left with a severance package including Merrill stock and options worth $161.5 million on top of the $91.4 million in total compensation he earned in 2006.

### Post-resignation

O'Neal was replaced as Merrill Lynch's CEO with John Thain from NYSE Euronext. Thain orchestrated the sale of Merrill to Bank of America in September 2008, and was eventually fired as CEO when it was revealed that he spent more than one million dollars redecorating the CEO suite.
CNBC included O'Neal in their list of "Worst American CEOs of All Time" in 2009. A New York Times book review argued that O'Neal was one of the key figures responsible for the global financial crisis. During the final hearings prior to the firm's merger with Bank of America, numerous people – including a founder's son, Win Smith – laid the blame on O'Neal for the firm's downfall and loss of independence.
On January 18, 2008, O'Neal was named to the board of directors of Alcoa.

### Financial Crisis Inquiry Commission

On March 11, 2016, a release of documents by the National Archives revealed that the Financial Crisis Inquiry Commission had recommended that O'Neal be prosecuted for multiple crimes in connection with his activities as CEO of Merrill Lynch during the lead up to the sub-prime crisis. No formal legal action has resulted, however.

## Personal

O’Neal met his second wife, economist Nancy Garvey, while working at General Motors. The couple married in 1988. The O'Neals have two children, twins who were born in 1991.
O’Neal first marriage ended in divorce, in 1984.
O'Neal is a golfer with a nine handicap, and has held memberships at four different country clubs, including Vineyard Golf Club.

## Honors and awards

* 1998: Kenneth A. Powell Alumni Award for Professional Achievement, jointly awarded by the African-American Alumni Association and the African-American Student Union at Harvard Business School
* 2000: Corporate Executive of the Year, Black Enterprise
* 2002: Achievement Award, Executive Leadership Council
* 2002: “Most Powerful Black Executive in America”, Fortune
* 2003: “25 Most Powerful People in Business”, Fortune
* 2005: Bank Street Celebration Honoree with Nancy Garvey (his wife), Bank Street College of Education
* 2007: Keynote address, Wharton Economic Summit, Michael L. Tarnopol Dean’s Lecture Series, Wharton School

## Board affiliations

O'Neal has been affiliated with several board of directors, board of trustees, and advisory boards. The following is a sample of his previous affiliations.
* director, ALCOA
* director, American Beacon Advisors, Inc.
* advisory board, American Cancer Society,
* director, Arconic
* advisory board, Bronx Preparatory Charter School
* trustee, Buckley School, New York
* trustee, Catalyst
* trustee, Center for Strategic and International Studies
* director, Clearway Energy
* director, Element Solutions
* member, Executive Leadership Council and Foundation
* director, General Motors Corporation
* member, Harvard Business School Visiting Committee
* director, Lower Manhattan Development Corporation
* director, NASDAQ Stock Exchange
* director, National Urban League
* director, Platform Specialty Products Corporation
* director, Ronald McDonald House
* director, W. E. B. Du Bois Institute for African and African American Research, Harvard