New Head, But Same Old Mission For Merrill's Retail
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Bank of America named general counsel Brian Moynihan, an executive well versed in legal and business principles, to replace John Thain. Moynihan, 49, has swiftly climbed the corporate ladder. He presided over Global Corporate and Investment Banking for Bank of America prior to its acquisition of Merrill Lynch. Before that, he was the head of Global Wealth and Investment Management. Moynihan was named general counsel this past December, a post he will retain until Bank of America finds a replacement.
"Brian Moynihan is a strong manager and one of those people who can effectively envision strategy and execute," said Ken Lewis, Bank of America chairman and chief executive officer. "He has excelled at everything we have asked him to do." But Lewis stressed that the new leadership did not a mean a change in direction for the Global Banking and Wealth Management units. "Those organizations, which formed the heart of Merrill Lynch, will continue to serve their clients as world class financial service providers," Lewis said. "We are quite happy with their performance since the merger."
Lately, Moynihan has divided his time between Wellesley, Mass., and New York, which is home for legions of Merrill's restive thundering herd of brokers. (A large—roughly $2 billion—team in New York City reportedly left Merrill last week. The New York Post is reporting more advisor defections.) But the news, coming as Bank of America scrambles to boost morale among Merrill advisors upset over the recent terms of retention packages, was greeted with mixed feelings. One Merrill advisor said the appointment of the well-qualified Moynihan signaled to him some potential cost reductions ahead. Indeed, Bank of America may be forced to swing the axe in the coming months as financial losses continued under Thain.
Thain, hailed earlier as a savior of Merrill—as CEO he spectacularly steered Merrill's purchase by Bank of America—reportedly fell out of favor with Bank of America CEO Ken Lewis as of late. The tide turned when Bank of America learned that Merrill had preliminary losses in the fourth quarter of more than $15 billion. Lewis was said to be hot under the collar, and then moved quickly to replace Thain with Moynihan. (In a PR disaster for Merrill, CNBC reported that Thain spent generously on his corporate office early last year.)
"My cousin is also general counsel with a major company. When I told him Moynihan got the job, his take was that Bank of America needs someone strong to handle a lot of human resources issues in the months ahead—and that means layoffs," said a nervous Merrill FA. "That's not a very unreasonable assumption." This past December as Lewis named Moynihan general counsel, he pointedly noted the "tumultuous times" on the Street, and the pressing need to name a person of Moynihan's caliber with "broad business and legal expertise."
Moynihan came aboard Bank of America in 2004 with its acquisition of FleetBoston Financial. At Feet, Moynihan left a strong imprint as the leader of the brokerage and wealth management unit after a stint building up Fleet's internet capabilities. He joined Fleet as deputy general counsel in 1993.
