Bank of America is laying the groundwork for its impending takeover of Merrill Lynch, releasing more information Wednesday about who will lead the combined new company.
The Charlotte bank announced that Greg Fleming, Merrill's president and chief operating officer, will head the combined company's corporate and investment banking unit. That post had been held by Bank of America's Brian Moynihan, who will lead private equity and global operations.
Bob McCann, Merrill's vice chairman and president of global wealth management, will head the combined organization of financial advisers, most of whom will be legacy Merrill workers.
The bank also said that Peter Kraus, Merrill's head of strategy, will leave “to pursue other opportunities.” The Wall Street Journal reported this week that Kraus could get a payout of up to $25 million when he leaves, though that exit payment is money he would have collected eventually if he had stayed on, according to one source. A Merrill spokeswoman declined to comment on the story.
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Bank of America already announced this month that Merrill's chief executive, John Thain, will stay with the combined company, but has not made any announcements about chief financial officer Nelson Chai. Both have been at Merrill for less than a year.
Merrill did away with most of its executives' severance agreements in February. But some prior stock awards for Thain and Chai will vest automatically upon Bank of America's purchase, regardless of whether they stay with the combined company.
Thain's awards will be worth $5.3 million and Chai's will be worth $1.2 million, according to regulatory papers filed Wednesday by Bank of America. Merrill's nine non-employee directors will get a combined $2 million.
The estimates are based on Bank of America's closing price on Oct. 17, of $23.24 – a significant decline from $33.74, the bank's share price on the last trading day before the purchase was announced.
Bank of America decided to buy Merrill Lynch last month, when the Wall Street investment firm was teetering as its peers like Lehman Brothers and Bear Stearns collapsed. The deal still requires the approval of Bank of America and Merrill shareholders.
Thain said Monday he expects thousands of job losses from his company's sale, largely in information technology, operations and corporate functions.
Bank of America announced other leadership changes Wednesday, including:
Tom Montag, Merrill's global head of sales and trading, will be head of global markets.
Keith Banks, Bank of America's president of global wealth and investment management, will be head of U.S. Trust and Columbia Management.
Cathy Bessant, Bank of America's president of global product solutions, will be head of global product solutions for the combined companies, operating from Charlotte.
Jim Kelly, Bank of America's business executive of technology and operations, will head technology and operations support for all of Thain's businesses, operating from Charlotte.