CEO Watch - Merrill Lynch, Stanley O'Neal

With the news yesterday that Merrill Lynch's MER (NYSE) third-quarter loss was a whopping $2.24 billion, rumours began appearing that Stanley O'Neal, Merrill's CEO, may be at risk. Merrill, like so many other large financial firms, found itself mired in the middle of the sub-prime debt disaster. The company was forced to write off $7.9 billion. As a follow up to yesterday's massive write-off, Zachary Kouwe, in the New York Post discussed potential candidates for O'Neal's job:

Mother Merrill has typically pulled people from inside its own ranks, but recent turmoil and departures could cause the board to look outside, sources told The Post.

The top internal candidate talked about yesterday was Co-President Greg Fleming, a Wall Street rainmaker who has run Merrill's successful investment banking and mergers business.

According to a piece by Jenny Anderson and Landon Thomas, Jr., in The New York Times, O'Neal is safe for the moment.

For the time being, its seems as though Merrill’s board is supporting Mr. O’Neal — although given the decline of almost 6 percent in the stock yesterday and the growing criticism over his management style and decision making, that support may not be infinite.

Mr. O’Neal has turned over virtually the entire board. Only two directors, Aulana L. Peters and Joseph W. Prueher, were there when he joined the board.

While there has been some speculation that former Merrill executives, perhaps under the leadership of Mr. Tully, might band together to pressure Mr. O’Neal to step down, as happened at Morgan Stanley two years ago, there is no sign that any such movement has formed.

Stay tuned as the story evolves.

For more on the story:

Independent UK
Business Week
TheStreet.com
The Chicago Tribune
Business Week
Securities Law Professor Blog
Daily Intelligencer