Merrill Lynch CEO ousted

NEW YORK -- Stan O'Neal was known as one of the most ruthless men on Wall Street -- clawing his way up from an impoverished upbringing in Alabama to run the world's largest brokerage.

His tough, take-no-prisoners drive at Merrill Lynch & Co. was celebrated when he delivered record profits during his five-year tenure as chief executive. But O'Neal, 56, who was purportedly fond of saying "ruthless isn't always that bad," found out Tuesday even he wasn't immune to the cutthroat ways of Wall Street.

After delivering investors a $2.24 billion quarterly loss, Merrill's biggest since being founded 93 years ago, O'Neal was forced to retire by a board of directors that he mostly picked. The unfolding credit crisis claimed its biggest corporate casualty so far, though he walks away with an exit package worth $161.5 million.

"What did him in so quickly is that O'Neal failed to develop supporters who would defend him and fight hard at the board or executive level," said Richard X. Bove, an analyst with Punk, Ziegel & Co. "One of the reasons is that he fired 26,000 people, some of which were his supporters, and that made him vulnerable."

O'Neal accepted blame for the losses. Merrill Lynch has a sizable portfolio of complex financial instruments called collateralized debt obligations, which combine slices of different kinds of risk. It was Merrill's bet on CDOs, and the subprime mortgages underpinning many of them, that proved to be his downfall.