Chapter 750: Merrill Lynch's Great Change (Medium)

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"I have no objection to Merrill Lynch's investments in mortgages and derivatives. But is it appropriate to use the means of issuing new shares?" said an old man in a black suit.

His name is Harold Fenner 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 our exposure to real estate investments. Either way it will increase Merrill Lynch's financial risk, and I don't think you want to see that. ”

Tom Christie, Chairman of Merrill Lynch International, a member of the Executive Committee, and a member of Merrill Lynch's Board of Directors. And, of course, a die-hard supporter of Stan O'Neill.

"We can raise money by issuing bonds!"

"Issuing bonds will increase Merrill Lynch's financial burden!"

The debate was ongoing, but it was clear that the atmosphere in the board was in Stan O'Neill's favor. This is also understandable. As the chairman and chief executive officer of Merrill Lynch, he has long built Merrill Lynch's most critical executive committee into a self-centered 'Yiyantang'.

In addition, in the more than three years since he took charge of Merrill Lynch, he 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. For the whole of 2004, Merrill Lynch's revenue of $37.7 billion and net profit of $5.43 billion also set a new record in Merrill Lynch's history.

On Wall Street, where money trumps everything, revenue and profit represent power. So when O'Neill made up his mind to do something, there weren't too many people on the board who would object. Unless suffering huge losses that are unbearable.

"Since everyone has different opinions on this matter, let's vote on it!" Stan O'Neill said directly.

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

Sure enough, after a round of voting by show of hands. Among the 21 board members present, except for three abstentions, and Guo Shouyun's opposition, the rest were in favor of increasing the share and capital increase.

"17 in favor, 1 against, and 3 abstained. The results are already obvious, so I announce...!"

"Wait a minute!"

A clear voice interrupted Stan O'Neill's words, and the eyes of everyone present were diverted.

Looking at the eyes of everyone focused on him, especially Stan O'Neill's complicated eyes, Guo Shouyun smiled and said, "I am against it... In addition, I felt that Mr. O'Neill's investment in the securitization of real estate mortgages and related products was too risky. As an honest Merrill Lynch shareholder, I cannot allow Mr. O'Neill to push Merrill Lynch into a loss. Therefore, I do not think that he is sufficient to assume the position of Chairman and CEO of Merrill Lynch, and I recommend that the Board of Directors remove him from his position and select a suitable successor!"

"Wow...!"

His words shocked everyone like a bolt from the sky.

In the past three years, Stan O'Neill has used the continuous growth of Merrill Lynch's performance to make his position in Merrill Lynch as stable as a rock! Those conservatives in Merrill Lynch have been forced to resign by him, and the rest have basically been marginalized. Therefore, the current Stan O'Neill has absolute control and strong authority over Merrill Lynch.

Now, Guo Shouyun is openly challenging that authority. No, it should be said that it was the overthrow of his rule. This was a storm for the Merrill Lynch board, which was accustomed to Stan O'Neill's arbitrariness.

"Mr. Guo, you are just a shareholder of the company. There is no authority to change Merrill Lynch's management. ”

Merrill Lynch's chief financial officer, Stan O'Neill's first dogleg, and board member Ahmesfakhani said in an angry tone.

"I think I have that power!"

Guo Shouyun stood up and looked around at the crowd: "As we all know, the Bruce Foundation owns 28.7% of Merrill Lynch's equity. Also, aren't you curious why the board representatives of Fidelity Funds and Morgan Family Funds are not here today? Because Fidelity Funds has already sold their shares in Merrill Lynch to me. The JPMorgan Family Fund also delegated to me the voting rights of 5.83% of the shares they held. In addition, I have other companies that hold an equity interest in Merrill Lynch, and the voting rights represented by the 13.9% equity grant of Merrill Lynch. ”

After a pause, Guo Shouyun swept past Stan O'Neill, who was pale and ugly, and the people in disbelief.

“… I think all of you here are elites in the field of finance, and they are all very math skills. I should understand the proportion of equity I hold in Merrill Lynch's total share capital. 53.13% gives me enough power to control everything about Merrill Lynch, including its management. So, Mr. Stan O'Neill, Mr. Ahmesfakhani, from now on, you are fired. ”

"You can't do that, I'm the patriarch of the company. In the past three years, Merrill Lynch has made great contributions to its growth!" Ahmesfakhani said in an anxious tone.

"I'm sorry, but I have enough authority to do that. Guo Shouyun smiled faintly, "I don't think it's a good fit for Merrill Lynch to be a CFO who uses the company's helicopter to airlift turkeys for his family." ”

The news that Ahmesfakhani used the company's business helicopter to airlift turkeys for his family for Christmas has long been widely spread within the company. And, it's no secret that he lives a lavish life on a mansion on Martha's Vineyard.

After being choked by Guo Shouyunding's words, Ahmesfakhani blushed and said, "How do we know if your so-called 53.13% stake is true?"

"It seems that Mr. Fakahane has lost his mind a little in his anxiety. I don't think anyone would joke about such a change in ownership in public. Of course, in order to convince you, I have prepared enough copies of the documents. ”

After the words fell, he took out his mobile phone and called Wang Jue and Wu Xiaojing, who were left outside. After a short time, they pushed the door open and walked in.

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

Seeing the change in everyone's expressions, Guo Shouyun crossed his arms and smiled: "Everyone should have no doubts now, right?"

Looking at the papers in his hand, Stan O'Neill's heart sank to the bottom. His worst fears had happened.

I can't describe the chagrin, frustration, unbearable and many other negative emotions in Stan O'Neill's heart at this moment. This feeling is like being hit in the head when I am most proud, and being splashed with a bucket of cold water at minus ten degrees when I am extremely excited, and the whole person is stunned when he looks at the document in his hand.

As Stan O'Neill fell silent, the atmosphere in the entire conference room dropped to freezing point. No one could have imagined that what was just an ordinary board meeting could turn into a prelude to a major change in Merrill Lynch's management. Everyone can imagine the impact of the conference on the financial community in the United States and around the world when the content of the conference is disseminated!

You must know that the current Merrill Lynch is the second largest investment bank on Wall Street after Morgan Stanley. With $1.75 trillion in assets under management, it is the world's largest securities broker and the largest private wealth manager, and at its peak, one out of every three people in the United States was a Merrill Lynch client. Even Goldman Sachs, which later became unstoppable, succumbed to it.

Its every move has a direct impact on the pattern of Wall Street, and even on the financial pattern of the United States! One can imagine what kind of turbulent waves will be set off in the outside world when Stan O'Neill and Ahmesfakhahani are swept away!

"Bruce, are you really planning to evict me?"

After a long time, Stan O'Neill, whose mood had calmed down a little, turned pale and said in an extremely heavy tone.

"O'Neill, there is no personal conflict between us. But you should know that the personalities of the two of us cannot coexist. And your business strategy for Merrill Lynch is something I will never agree with. So you... You can only leave. Guo Shouyun said solemnly.

In three years, I have doubled Merrill Lynch's stock price and increased Merrill Lynch's revenue and net profit by 1.5 times. Why do you deny my reforms to Merrill Lynch?" Stan O'Neill exclaimed.

Merrill Lynch's success in the past three years is the most proud of him, and no one can question it.

"I admit that your management of Merrill Lynch for three years has been really successful. But your self-righteous personality is carried away by the rolling profits. Use the company's valuable profits to buy G4 planes and helicopters, and pile up expensive wine in the company's cellar for your personal use. In order to spend a vacation with his family, he wasted precious time and moved the company's annual meeting to South Africa. As long as you agree to something, no one can interfere. Merrill Lynch spends $50 million a year on executive expenses to the top alone. 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 followed Goldman Sachs and Lehman, but did not have his own opinions. Investing in high-risk projects has become increasingly negligent in hedging risk, so much so that Merrill Lynch's exposure to equity investments, as well as mortgage-backed real estate and derivative securities, has increased. I really don't know if you have enough money to pay if the real estate downward cycle comes. ”

"But that's right. You are just the operators of the business. The company is losing money, and you can still walk away with a good pension. Therefore, you just need to make sure that the company's profitability is high enough to ensure that you can enjoy the luxury, so that you can get more salary and equity awards. As for the crisis, it's just a loss for shareholders and shareholders!"

"But I'm sorry, I don't agree with this business strategy very much. I don't like you to use the company's funds to provide your own luxury. So, we can't coexist, we can't work together. ”

Stan O'Neill's expression was uncertain, and 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'll pay me $120 million in pensions and pensions. Paid $85 million in pension to Ahmesfa Kahani. And the pension for the entire Merrill Lynch management is $475 million!"

The golden parachute refers to the financial security given by the company to the senior management of the company after losing their original job. "Gold" means generous compensation, and "parachute" means that executives can avoid the shock of a change in control of the company and achieve a smooth transition.

This strategy of making the acquirer "bleed" is one of the "poison pill plans" of anti-takeovers. The principle can be extended to the retirement compensation of various reasons for the operator. And these compensation include stock options, bonuses, severance pay, etc. Of course, in addition to anti-takeovers, the Golden Parachute Program is also one of the effective ways to retain talent. Twenty percent of U.S. companies ranked within 1,000 have signed a plan with management.

Since 2000, 21 CEOs have retired or left the company with more than $100 million worth of stock, severance payments, pensions and other payments. Notable toppers were former GE Group CEO Jack Welch Jr., who ended his 20-year career with the group in 2001 and received $417 million in compensation.

Of course, Jack Welch led GE out of the doldrums and back into America's top big business, and no one would say anything about his high pension. But a guy like Hank McKinnell, CEO of Ruihui Pharmaceutical, who has been in charge of the company for 5 years and has lost $140 billion in market value, can still leave with nearly $200 million in compensation when he leaves is more hated.

And people like Hank McKinnell will be repeated on Wall Street after the subprime mortgage crisis. Similar to the current Stan O'Neill, after selling Merrill Lynch to Bank of America, he left with a $160 million pension. Ahmesfakhani received $120 million.

The U.S. government used the taxes paid by citizens to save financial institutions such as Merrill Lynch, AIG, and Bear Stearns. But the management, which brought these companies to the brink of bankruptcy, went to live their prosperous lives unharmed with a large pension. Such tragicomedy led directly to the outbreak of the Occupy Wall Street movement.

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