(Updates with O'Neal declining to comment through spokesman)
By Jessica Papini and Marshall Eckblad Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Merrill Lynch & Co.'s (MER) final shareholders meeting Friday struck a somber, even funereal note.
Merrill alumni attending the meeting at the company's New York headquarters expressed sadness and anger as they voted to merge the fabled Wall Street firm with Charlotte's Bank of America Corp. (BAC).
While most shareholders and employees agreed the merger was necessary, it was the way Merrill's demise came about that was most upsetting to them.
Several hundred people turned out for the vote. Bank of America shareholders also met Friday in Charlotte to ratify the $50 billion acquisition. Owing to Bank of America's slumping share price, the deal's value has declined by $30.3 billion since September and is now $19.7 billion.
Merrill Chief Executive John Thain announced shareholders' preliminary approval of the deal mere seconds after a final few paper ballots were collected.
Thain, 53 years old, will remain on board after the merger, overseeing global banking, securities and wealth management.
Most Merrill shareholders cast their ballots well before the meeting, making the gathering in New York mostly symbolic.
But while the formal proceedings were brief, Thain carved out ample time for angry and even tearful Merrill alumni to address the group. Having arrived at Merrill a little more than a year ago, Thain was decidedly sympathetic and patient as sad and angry Merrill veterans took turns eulogizing the firm's story and assigning blame for its demise.
Thain was stoic as speakers trashed the name of Stanley O'Neal, his predecessor, under whom the firm made huge bets on residential subprime mortgages - a move that brought Merrill to its knees once the housing market went bust.
Merrill's board ousted O'Neal 14 months ago and replaced him with Thain, the reserved and brainy Wall Street executive who had previously headed the New York Stock Exchange, and before that worked at Goldman Sachs Group Inc. (GS). O'Neal left with a $160 million retirement package. O'Neal declined to comment through a spokesman.
Thain went so far as to shush Evelyn Davis, a Wall Street gadfly who often speaks at shareholder meetings, when she began to interrupt the meeting's featured address.
"Now Evelyn," Thain said, "you have to give other people time" to speak.
Winthrop Smith Jr., the son of one of the founding partners of Merrill Lynch, Pierce, Fenner & Smith and who worked at Merrill for 28 years, spoke of Merrill's culture, which wasn't "brick and mortar," he said. "Merrill was a brand and we were proud to wear it on our hearts. We had a swagger and were damn proud to be part of the thundering herd," he said.
Smith said that Charlie Merrill, co-founder of Merrill Lynch, created a culture where the customer came first and people were treated with respect.
Thinking back to when Smith worked at the firm, he said, "when someone made a mistake they owned up to it, fixed it, and never covered it up."
Smith eventually left the firm in 2001 when it was clear O'Neal was going to take over as CEO. When Smith left he was chairman of Merrill Lynch International, president of the firm's international private client group, and a member of its executive management committee.
Referring to the exodus of experienced executives at Merrill when O'Neal took over, Smith said, "Shame on members of the board for never asking any of us who loved this firm" why they were leaving.
Smith also criticized the board for allowing "the former CEO to surround himself with young and inexperienced people" and to letting O'Neal "cut costs and businesses so severely and bluntly for the sake of short-term earnings...and to fill the balance sheet with toxic waste."
Smith said he wasn't alone in his sentiments. He received an email last week from a former executive at Merrill, stating, "It is heartbreaking to see what greed and the absence of principles did to Merrill, one of the finest companies in America."
He questioned where the accountability lies. "No wonder that the Main Street that learned to trust Merrill Lynch in the 1940s has lost faith in the Wall Street in 2008," he said.
Another speaker, former longtime Merrill stock market analyst Robert Farrell, said he agreed with Smith's assessment of the company's demise.
A shareholder from Trenton, N.J., who didn't give his name, said, "We only need one pallbearer for this funeral, and that's Stan O'Neal." The man told the assembly that he wouldn't vote for the merger under any circumstances.
Smith said, "Today didn't have to come. Today is not the result of the subprime mess or synthetic collateralized debt obligations, they are the symptoms." He called Merrill a story of "unprincipled leadership and the failure of a Board of Directors to understand what was happening to this great company and its failure to take action soon enough."
Smith praised Thain for showing clear leadership during the financial crisis in September, and for knowing "what Mother Merrill really stood for."
Thain reached the deal to sell Merrill after Bear Stearns had collapsed and as Lehman Brothers (LEHMQ) prepared to file for bankruptcy.
As the meeting progressed, outside the auditorium other Merrill employees filed through turnstiles down the hall, heading off for another day's work.
-By Jessica Papini, Dow Jones Newswires; 201-938-2437; jessica.papini@dowjones.com and Marshall Eckblad, Dow Jones Newswires; 201-938-4306; marshall.eckblad@dowjones.com
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(END) Dow Jones Newswires
December 05, 2008 16:22 ET (21:22 GMT)

Publié le 05 Décembre 2008 Copyright © 2008 Dowjones