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 [email protected]