Make us your home page
Instagram

Trigaux: Cultures collide in forced financial marriage

The proposed sale of New York's Merrill Lynch & Co. to North Carolina's Bank of America Corp. arrived in the whitest heat of the Wall Street meltdown earlier this fall. Ever since, signs have blossomed of a culture clash between the two towering financial institutions.

The hearts and souls of these two firms are so far apart it makes the Odd Couple look like pals.

The rift between the elite investment banking world and the workaday commercial banking scene is legendary. It must gall many at Merrill Lynch, one of the rare and still independent old-line Wall Street firms, that it fell into such desperate straits that it could be acquired. Worse, the phone call to sell out to a Charlotte banking company was initiated by Merrill CEO John Thain.

Friday was the join-us-or-leave-us deadline Bank of America gave to the top producers at Merrill's global wealth management unit.

Friday's Wall Street Journal headline probably didn't soothe the rivalry: "Cultures Clash as Merrill Herd Meets 'Wal-Mart' of Banking."

Later Friday the votes were tallied. As of 3 p.m., Merrill Lynch confirmed that only 6,200 advisers, or 37 percent of its financial advisory force, had signed the retention agreement offered by new parent Bank of America.

More important, though, Merrill said 99 percent of its top financial advisers did sign the agreement.

According to trade press reports, reps producing more than $1.75-million got 75 percent in upfront cash, taxable over seven years, and another 25 percent in deferred bonus over three years.

Competing investment firms like Morgan Stanley and UBS tried to recruit some of Merrill's stronger brokers.

According to Friday's Wall Street Journal story:

• "Merrill staffers joke nervously that Bank of America employees are recognizable in the elevators by their less expensive attire and American-flag lapel pins."

• In an interview with Fortune, BofA CEO Ken Lewis noted acidly that Merrill's "staff people were making a lot more than our staff people. That won't last."

Shareholders of Merrill Lynch and Bank of America will vote on BofA's proposed takeover on Dec. 5. It's probably a slam dunk.

After all, for all of Merrill Lynch's apparent distaste over the deal, where else was the firm going? Commercial banking companies long ago invaded Wall Street and snapped up big-name firms like Salomon Bros. and Smith Barney.

Now the few firms still left on Wall Street are scrambling to become banking companies.

Robert Trigaux can be reached at trigaux@sptimes.com.

Trigaux: Cultures collide in forced financial marriage 11/14/08 [Last modified: Tuesday, November 18, 2008 3:19pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. United Airlines CEO to investors: We'll be more focused on customers

    Airlines

    CHICAGO — The CEO of United Airlines assured shareholders Wednesday that the company is doing all it can to be more customer-friendly since video surfaced of a passenger being violently ejected from a plane last month.

    Chicago Police arrest protesters after they sat down in a busy street blocking traffic outside a United Airlines shareholders meeting Wednesday, in downtown Chicago. The people who were arrested were protesting the low pay of employees of companies that provide meals and other services for United Airlines at Chicago's O'Hare Airport.
[Associated Press]
  2. Humana adding 200 telemarketing jobs in Tampa Bay

    Economic Development

    TAMPA — Health insurance company Humana Inc. is hiring more than 200 workers in Tampa Bay. The Louisville, Ky.-based company said Wednesday that the new positions will focus on phone sales for Humana's direct marketing services department.

  3. Tampa Bay home prices still soaring amid tight supply

    Real Estate

    Sales of Tampa Bay homes dropped in April but prices surged yet again as Florida's real estate market continued to be defined by tight supply and high demand.

    The historic Century Oaks estate overlooking Clearwater Harbor has sold for $11.18 million, the most ever paid for a home in the Tampa Bay area. [Courtesy: Coastal Properties Group]
  4. These days, don't hit the theme park without an app and a phone charger

    Florida

    Emile Crawford stocks two back-up phone battery chargers these days when she takes her kids to Disney World. But she dare not venture into a theme park without a smart phone app, an accessory becoming as necessary as sunscreen in Florida theme parks.

    A wristband visitors will wear at the new Volcano Bay water park in Orlando, Florida. The wristband, called Tapu Tapu, tells you when it's your turn to get on a ride. It also lets you pay for food so you don't have to carry a wallet and opens lockers so you don't have to  carry a key. (Universal via AP)
  5. James Cameron, Zoe Saldana and more appear at Disney's Pandora

    Florida

    ORLANDO — As he stood on a stage at Disney World Wednesday, director James Cameron revealed his teenage dreams.

    Zoe Saldana tweeted a photo of herself from Wednesday's appearance at a new land in Disney's Animal Kingdom, Pandora -- the World of Avatar. The land is based on James Cameron film, in which she stars. Photo via Twitter.