01 Jun 2001
Merrill Lynch's Stan O'Neal
A Long Road of LearningRe: Dave Komansky (AMP 107)by Susan YoungTopics:
The path from the rural South to the upper echelons of Wall Street is not
heavily traveled. Indeed, E. Stanley ONeal (MBA 78) is surely
the only person who has made the journey from the fields of Wedowee, Alabama
where he labored on his grandfathers farm picking corn and
cotton to the 32nd floor of Merrill Lynch headquarters at
Manhattans World Financial Center.
As president of Merrills U.S. Private Client Group, ONeal
oversees sixteen thousand brokers or financial advisors, as he calls
them in eight hundred branch offices. Also an EVP and a member of the
Merrill Lynch Executive Management Committee, ONeal is one of the
firms top officers and is frequently mentioned as being on the
shortlist to be the next chairman of the 150-year-old firm.
My father told me I wasnt cut out for farm work, says
ONeal, whose easy smile and relaxed demeanor almost belie his stature
in the pinstriped, power-brokering world of Wall Street. I never took
it as an insult. Seated in a conference room with an expansive view of
the Hudson River, ONeal recalls that work was hard to come by in
Wedowee, population 750, and the options, particularly if you were poor and
black, were limited. ONeals mother worked as a
domestic, cleaning houses, and when he wasnt harvesting
crops with his three younger siblings, he sold and delivered newspapers.
As it turned out, his father wasnt cut out for farming either, and
when ONeal was 12, his family moved to a housing project in Atlanta,
where his father eventually landed a job at a General Motors factory in
Doraville. Stan ONeal attended the General Motors Institute (which
later became Kettering University), a co-op program where he alternated
between studying engineering and industrial administration and working in
the Doraville plant. ONeal, the first in his family to finish college,
says of his undergraduate days, I really didnt have an
understanding of the world or any role models, but I had a strong desire to
learn, and I think that is what pulled me through. After graduating in
the top 20 percent of his class, ONeal returned to Doraville, working
as a supervisor at the GM facility. When he was accepted at HBS, GM gave him
a no-strings-attached scholarship.
I was naive, but I was also undaunted, says ONeal of his
arrival at Soldiers Field his first trip to Boston. I had never
had a set of peers like that. They were an extremely sophisticated group who
knew about the world, and they really motivated me. One of only a few
African Americans in his class, ONeal says simply: Not a lot of
people looked like me.
That was also the case in the treasurers office at GM in New York,
which he joined after graduating with honors from HBS. After eight years
with GM including a stint as treasurer of GM España in Madrid
ONeal had cultivated an appetite for the deals business.
So when Merrill Lynch came knocking, he gladly opened the door, accepting a
position as VP of the firms high-yield business. I knew it was a
great fit for me, he says.
During the fifteen years he has worked at Merrill, ONeal has proved
himself again and again, moving from various positions in different
divisions of the firm financial services, global capital markets,
investor strategies, corporate and institutional clients, and corporate
services. In 1998, Merrill chairman and CEO David H. Komansky (107th AMP)
asked him if hed consider being CFO. This was an opportunity to
see the whole firm comprehensively, observes ONeal, who accepted
the offer despite never having looked at Merrills balance sheet and
knowing that insiders considered the CFO position a thankless assignment.
Im a sucker for learning opportunities, he adds, and
this was one I couldnt pass up.
After two years as CFO, ONeal rose to his current post, making him the
first-ever nonbroker to head the firms brokerage business. This
is the best job Ive ever had, and Ive had a lot of good
ones, ONeal says, explaining that the rewards, challenges, and
people are what keep him most interested. Those challenges include competing
for clients in a saturated market, finding ways to serve a more
sophisticated group of clients, and continuing to improve the quality of
service provided. We have a tremendously successful organization with
a legacy of winning. The challenge is to continue to evolve and adapt to the
new realities of the marketplace. ONeal cites Merrills
Financial Advisory Center and Merrill Lynch OnLine as examples of how the
firm has responded to clients changing needs.
While his future looks bright at Merrill, ONeal doesnt speculate
about whether he will be asked to take its helm, a move that would make him
one of the highest-ranking African Americans on Wall Street. He prefers
instead to concentrate on his progress in his current position. I
think we are 75 percent of the way there in terms of laying the foundation
for client services, but were probably 25 percent in terms of
achieving all the things we want to. There is no shortage of challenges or
Outside the office, ONeal says he sometimes finds time to play a
bad game of golf. He is a member of the HBS Visiting Committee and
sits on the boards of the Ronald McDonald House, the National Urban League,
and Nasdaq. Recently, he also joined an advisory board of the American
Cancer Society to help lessen the racial divide in cancer mortality rates.
We as a society have the capability to provide much greater
care, he says. Its a matter of marshaling focus and
resources. There is an enormous amount of good that can be done.
ONeal is still very close to his extended family, whom he sees twice a
year when he and his wife, Nancy Garvey, take their twins to visit Roanoke,
Alabama (the town in which he was born, he notes, because the Wedowee
hospital didnt serve African Americans). He puts his pride in raising
his 10-year-old son and daughter above all his other accomplishments. His
goal is to provide them with the same strong sense of morals that his
parents instilled in him. I think life is about doing the best that
you can with what you are born with, he remarks. Its a
fascinating journey to discover what that is.
Class of MBA 1978, Section A