As I predicted last Wednesday following Merrill Lynch’s (MER) earnings call, it has just been announced that CEO O’Neal has “retired”. MER has established a search committee to hire a CEO. CNBC is commenting that the statement’s use of the word “retirement” implies that O’Neal will exit the firm with a potential compensation package that could exceed $160M.
So whatever happened to “pay for performance”? Why does O’Neal’s poor performance at MER warrant additional compensation? CEOs should take writedowns corresponding to their company’s losses.
Related Post: O’Neal’s Exit (10/24/07) in the Predictions section.