Vol 2 Chapter 750 Merrill Lynch’s Big Change (Middle)

Chapter 750 The Great Change of Merrill Lynch (Part 2)

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“I’m not against Merrill Lynch’s investment in real estate mortgage loans and derivatives. But is it appropriate to use the means of issuing new shares?” After everyone looked at each other, an old man in a black suit said.

His name is Harold Finner, and he is an independent director of Merrill Lynch.

“If we don’t issue new shares, we can only increase Merrill Lynch’s financial leverage, or expand the risk exposure of real estate investment. Either way will increase Merrill Lynch’s financial risk, which I think you don’t want to see. ”

Tom Christie, Chairman of Merrill Lynch International, a member of the Executive Committee, and a director of the Merrill Lynch Board of Directors. Of course, is also a die-hard supporter of Stan O’Neal.

“We can raise money by issuing bonds!”

“Issuing debt will increase Merrill Lynch’s financial burden!”

The debate continued, but it was clear that the atmosphere on the board was in Stan O’Neal’s favor. This is also understandable. As the chairman and CEO of Merrill Lynch, he has long built Merrill Lynch’s most critical executive committee into a “one-word hall” centered on himself.

In addition, he has been in charge of Merrill Lynch for more than three years, and it has indeed reversed the dilemma of Merrill Lynch’s rapid expansion of international business at the end of the last century and the decline in revenue levels caused by the impact of Internet finance. Throughout 2004, Merrill Lynch’s revenue of $37.7 billion and net profit of $5.43 billion also created a new record in Merrill Lynch’s history.

On Wall Street, where money trumps everything, revenue and profits represent power. So when O’Neal made up his mind to do one thing, not many on the board would object. Unless you suffer unbearably huge losses.

“Since everyone has different opinions on this matter, let’s vote!” Stan O’Neill said directly.

Since he convened this board of directors and proposed to issue additional shares, he naturally has absolute certainty.

Sure enough, after a round of show of hands. Among the 21 board members present, except for three abstentions and Guo Shouyun’s only Miao opposition, the rest are in favor of expanding shares and increasing capital.

“17 in favor, 1 against, 3 abstentions. The results are already clear, so I declare…!”

“Wait a moment!”

A clear voice interrupted Stan O’Neal’s words, and also made everyone present look away.

Seeing everyone’s eyes on him, especially Stan O’Neill’s complicated eyes, Guo Shouyun smiled and said, “I object! … In addition, I think Mr. O’Neill’s investment in real estate mortgage loans and the securitization of related products contains too much. Risk. As an honest Merrill shareholder, I cannot allow Mr. O’Neal to drive Merrill into a loss. Therefore, I don’t think he is enough for the position of Chairman and CEO of Merrill Lynch, I It is recommended that the Board remove him and select a suitable successor!”

“Wow…!”

His words shocked everyone like a bolt from the blue.

In the past three years, Stan O’Neal has used Merrill’s continuous growth to make his position in Merrill a rock! Those conservatives at Merrill were forced to resign constantly by him, and the rest were basically marginalized. Therefore, the current Stan O’Neal has absolute control and powerful authority over Merrill Lynch.

Now Guo Shouyun publicly challenges that authority. No, it should be said to overthrow his rule. It was a rough sea for a Merrill Lynch board, accustomed to Stan O’Neal’s dictatorship.

“Mr. Guo, you are only a shareholder of the company. There is no power to change Merrill Lynch’s management.”

Merrill Lynch’s chief financial officer, Stan O’Neill’s first dogleg, and board member Ahmes Fakahani said angrily.

“I think I have this power!”

Guo Shouyun stood up, looked around and said, “As we all know, the Bruce Foundation owns 28.7% of the shares of Merrill Lynch. Also, aren’t you curious why the board representatives of Fidelity Fund and Morgan Family Fund didn’t show up today? Because Fidelity Fund has already They sold their Merrill Lynch shares to me. The Morgan family fund also delegated their 5.83% voting rights to me. In addition, I have other companies that hold shares in Merrill Lynch, and the grants are 13.9% % of the voting rights represented by Merrill Lynch’s equity.”

After a pause, Guo Shouyun swept over the pale and ugly Stan O’Neal, as well as the incredible crowd.

“…I think everyone here is an elite in the financial field with strong mathematical ability. You should understand the shareholding I hold in the total share capital of Merrill Lynch. 53.13% gives me enough power to control Merrill Lynch. Everything, including its management. So, Mr. Stan O’Neill, Mr. Ahmes Fakahani, from now on, you are fired.”

“You can’t do this, I’m a veteran of the company. I have made great contributions to Merrill Lynch’s growth in the past three years!” Ahmes Fakahani said anxiously.

“I’m sorry, I have enough power to do this.” Guo Shouyun smiled lightly, “I don’t think it is suitable for Merrill Lynch Bank to use the company’s helicopter to transport turkeys by air to serve the CFO of his family.”

News that Ahmez Farqahani used the company’s business helicopter to airlift turkeys to his family for Christmas has long spread within the company. And it’s no secret that he lives lavishly on his Martha’s Vineyard mansion.

After being blocked by Guo Shou Genting for a while, Ahmes Fakahani blushed: “How do we know if your so-called 53.13% stake is true?”

“It seems that Mr. Fakahani has lost his mind under his anxiety. I don’t think anyone will joke about the change of shareholding in public. Of course, in order to convince everyone, I have prepared enough documents. copy.”

When the words fell, he took out his mobile phone and called Wang Jue and Wu Xiaojing who were staying outside. Not long after, they pushed the door and walked in.

The two each held a lockbox. After opening it, the authorization documents and equity change documents were handed over to everyone one by one.

Seeing the changes in everyone’s expressions, Guo Shouyun folded his arms and smiled, “Now everyone should have no doubts, right?”

Looking at the document in his hand, Stan O’Neal’s heart sank to the bottom. What he feared the most had happened.

It is impossible to describe the annoyance, depression, unbearable and many other negative emotions in Stan O’Neal’s heart at this moment. This kind of feeling is like being slapped in the head when I was most proud, and when I was extremely excited, I was poured a bucket of cold water at minus ten degrees, and I was stunned when I looked at the document in my hand.

With Stan O’Neal’s silence, the atmosphere in the entire conference room dropped to freezing point. No one could imagine that what was just an ordinary board meeting would turn into a prelude to a major change in Merrill Lynch’s management. Everyone can imagine what kind of impact it will have on the U.S. and even the global financial community when the content of the conference spreads!

You must know that Merrill Lynch is now the second largest investment bank on Wall Street after Morgan Stanley. It manages $1.75 trillion in global assets, is the world’s largest securities brokerage, and the largest private wealth management institution. At its peak, one out of every three people in the United States was a Merrill Lynch customer. Even the unstoppable Goldman Sachs succumbed to it.

Its every move directly affects the pattern of Wall Street, and even the financial pattern of the United States! It is conceivable that when Stan O’Neal and Ahmez Fakahani are swept out of the house, what kind of stormy waves will be set off in the outside world!

“Bruce, are you really going to expel me?”

After a long time, Stan O’Neill, who had calmed down a little, turned pale and said with a very heavy tone.

“O’Neal, there is no personal conflict between us. But you should be clear that our personalities cannot coexist. And your business strategy with Merrill is something I will never agree with. So you… can only leave. .” Guo Shouyun said solemnly.

“Why? In the past three years, I have doubled Merrill’s share price and increased Merrill’s revenue and net profit by 1.5 times. Why do you deny my reform of Merrill?” Stan O’Neill said excitedly .

Merrill Lynch’s success over the past three years is what he is most proud of, and no one can question it.

“I’ll admit, you’ve managed Merrill successfully for three years. But your headstrong personality has been carried away by the profits. Use the company’s precious profits to buy G-4 planes and helicopters, put expensive wine The company’s wine cellar is full, but it is only for your personal use. In order to take a vacation with your family, waste your precious time and move the company’s annual meeting to South Africa. As long as you agree, no one can interfere. Just the administrative expenses for the top management are as high as 50 million US dollars. The guys at Enron didn’t have as much luxury as you!”

“Of course, what I can’t approve of more than your extravagant spending on your personal life is your operational strategy at Merrill Lynch. Blindly following Goldman Sachs and Lehman without your own opinion. Taking big strides in high-risk projects Investing, but more and more negligent in hedging risks, so that Merrill Lynch’s risk exposure in equity investment, real estate mortgage loans and derivative securities is getting higher and higher. I really don’t know, once the real estate down cycle comes, you guys Is there enough money to pay?”

“But it’s also true. You are only the operators of the business. The company loses money, and you can still leave with a generous pension. Therefore, you only need to ensure that the company’s profitability is high enough to ensure your luxury, so that you can take It would be nice to get more salary and equity rewards. As for the crisis, it is just a loss for shareholders and shareholders!”

“But I’m sorry, I don’t agree with this kind of business strategy. I don’t like that you use the company’s funds to provide your own luxury. Therefore, we can’t coexist and work together.”

Stan O’Neal looked gloomy. After a long time, he stared at Guo Shouyun and threatened: “Bruce, the company has a ‘golden parachute’ plan for anti-takeovers. If you fire me, you will pay me $120 million in pension and retirement. $85 million for Ahmez Farkhani. And $475 million for the entire Merrill Lynch management!”

The golden parachute means that as the senior management of the enterprise, after losing their original jobs, the company provides them with financial protection. “Gold” means generous compensation, and “parachute” means executives can make a smooth transition that avoids the shock of a change in control of the company.

This strategy of causing the acquirer to “bleed a lot” is one of the “poison pill plans” for anti-takeovers. The principle can be extended to apply to the termination compensation for various reasons of the operator. These compensations include stock options, bonuses, severance pay, etc. Of course, in addition to anti-takeover, the golden parachute plan is also one of the effective ways to retain talents. 20% of companies ranked within 1,000 in the United States have signed such plans with management.

Since 2000, a total of 21 CEOs have received more than $100 million worth of stock, severance, pensions and other payments upon retirement or departure from the company ~www.readmtl.com~ The famous top one is Jack Welch Jr., former CEO of GE, ended his 20-year career at the group in 2001 with a $417 million compensation package.

Of course, Jack Welch led GE out of its slump and became America’s top big company again, and no one would say anything about his high pension. But like Hank McKinnell, CEO of Ruihui Pharmaceuticals, who has been in charge of the company for 5 years, Ruihui has lost $140 billion in market value, and he can still leave with nearly $200 million in compensation when he leaves. Rather hated.

And people like Hank McKinnell will be repeated on Wall Street after the subprime crisis. Similar to the current Stan O’Neal, after selling Merrill to Bank of America, he left with a $160 million pension. And Ahmes Fakahani got $120 million.

The US government used the taxes paid by citizens to save financial institutions such as Merrill Lynch, AIG, and Bear Stearns. But the management gates that brought these companies to the brink of bankruptcy lived out their wealthy days with generous pensions unscathed. Such a tragicomedy led directly to the outbreak of the Occupy Wall Street movement.

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