In a cramped office, tucked just off the trading floor at Merrill Lynch's World Financial Center headquarters in lower Manhattan, Robert J. McCann, sat me down one afternoon in the early 1990s for a surprise lecture. A rather stern lecture, at that. McCann — then a rising star in charge of Merrill's U.S. equities unit and a leader in the firm's legendary hard-driving culture built on the Thundering Herd of retail brokers — was not pleased with the unflattering story I had written for McGraw-Hill's Securities Week.

Perhaps “steaming mad” would be a more apt description of his mood. I had been expecting pleasant banter and a routine tour of his sprawling trading floor. Instead, here was McCann, unsmiling, forcefully trying to prove my article wrong: Growth here, growth there, growth everywhere, he said, tapping his finger at colored bar charts on a tiny board he held aloft. Among the good news, the charts showed Merrill's expanding share of retail and institutional assets.

To my amazement (and embarrassment), McCann was persuasively arguing that the premise of my article — that his trading unit was scaling back — did not tell the full story. Indeed, it did not. Merrill, as the story correctly reported, was dropping stocks that were no longer cost-effective to trade. But by other measures — the ones McCann chose to highlight — the firm was growing. “I've never met an Irishman who let another Irishman down,” McCann told me, referring to our common heritage. Over the years, I was not surprised to notice McCann scale the corporate ladder. You don't get to the inner sanctum of such an alpha-male organization on Irish charm alone. He also picked his battles wisely and fanatically pursued his agenda with facts, figures and common sense.

A 26-Year Run

That journey came to an end on January 5, barely four days after Bank of America completed its controversial acquisition of Merrill Lynch. On that day McCann, 50, unexpectedly announced his retirement from Merrill, where he worked as vice chairman and president of the Global Wealth Management (GWM) unit, Merrill's “advice-based wealth management services,” according to the firm's website. At its peak the unit had 16,690-plus financial advisors who handled $1.6 trillion in client assets. McCann's announcement stunned Merrill advisors and senior brass alike. It raised questions about who would succeed McCann; after all, McCann had an impressive, 26-year run to the top of the global brokerage powerhouse. He had come this close to being named CEO. “It seems a little odd Bob would leave this early in the transition when there is still a lot of work to be done,” said one Merrill executive, who once reported to McCann.

In the end, it wasn't odd at all. In his first public comments since leaving Merrill, McCann recently told Registered Rep.: “I felt the closing of the Bank of America/Merrill Lynch deal was a logical time for me to step aside, take some time off and consider the next chapter in my career. I am proud of my career at Merrill Lynch and have good feelings about the company and my time there.”

(For more on that interview, see: In First Media Interview, McCann Says Resignation Was At A "Logical Time")

McCann may have regarded it as a natural time to step aside, but others had widely assumed that he would stay on long past BofA's acquisition, in part to help fold Merrill's worldwide brokerage operations into a domestically focused money center bank. It seems clear that BofA wanted him to stay, that he wasn't forced out, as was rumored. After all, like some other Merrill executives, McCann received a restricted stock grant (a performance-based bonus, according to SEC filings) that was converted into BofA shares immediately prior to the merger. It was also assumed he'd help preserve the Thundering Herd's hard-charging culture. Not surprisingly, his exit worried some advisors who had become increasingly agitated when a succession of other leaders also bolted. These included Greg Fleming, investment banking chief; Brent Clapacs, who was co-head of European markets; and Brian Hull, vice chairman under McCann in the brokerage unit.

McCann, who is said to have earned about $12.7 million in compensation in 2007, had a habit of making unexpected moves. In 2003 he quit Merrill, taking a post as vice chairman for brokerage operations at AXA Advisors. About three months into the new job, McCann returned to Merrill. Stan O'Neal had won, with some palace intrigue, it is said, the title of CEO, and he needed to assuage the brokerage force, who considered him an outsider since he had never been a broker before. O'Neal lured McCann back making him vice chairman of Merrill's Global Wealth Management, a post from which he supervised the retail brokerage, research and asset management; McCann reported directly to O'Neal. O'Neal correctly understood that the brokerage force regarded McCann as an adroit manager and an icon of Merrill culture; the reps accepted McCann back as a hero. (McCann, according to legend, was so eager to return to Mother Merrill that he accepted O'Neal's offer without even inquiring about his compensation. He learned about his comp plan from human resources on his first day back to work. McCann did not respond to requests to be interviewed for this story.)

The Brokerage Champ

Sure enough, McCann's most recent (and final, barring some strange turn of events) departure from Merrill did not sit well with most advisors we polled (albeit unscientifically). “He was seen as the champion of the brokerage division. Now a lot of FAs think there is no voice at the top speaking for them anymore,” said Norm Pappous, a former Merrill advisor in Galveston, Texas. “He was a great advocate for the troops.” Added a big producer in the Midwest: “The mood is not good here with Bob gone.” (Of course the mood might be described as dour. This is a humbled Merrill Lynch, a former stalwart that had to be pulled back from the brink by BofA's $50 billion all-stock acquisition in September. And consider this: When the deal closed in early January, it was worth only about $24 billion. Merrill FAs' net worth, a portion tied up in company stock, took a giant hit, obviously.)

McCann's star had also dimmed with the ascent of John Thain, who edged out McCann in the running for Merrill CEO. The two had famously clashed after Thain suspected McCann of leaking a story to the press about McCann's combined role in the new BofA/Merrill organization. Thain publicly scolded McCann in his presence and in front of employees at a meeting after the announcement. Thain did not allow a visibly upset McCann to pick up the microphone. (On Jan 22, Thain himself, facing public opprobrium for paying early bonuses and lavishly decorating his office, also left Merrill.)

But McCann's days as a CEO hopeful were numbered. The BofA deal had seriously undermined McCann's power base. Even though McCann was named “head of the combined financial advisor organization,” the job carried no title. And McCann did not get the big prize: leader of the Global Wealth Management business. The new corporate masters at BofA said they would review that position later.

“McCann was on his way up at Merrill in terms of what he had accomplished and his age. He was among the top five executives in the running as the next CEO of Merrill,” said industry recruiter Danny Sarch. “In the new Bank of America org chart, McCann wasn't even in the top 25.”

That news was a blow to Merrill's Circle of Champions, a group of top-producing advisors who once pressed the board to name McCann as a president, or co-president of the company in 2007, before it settled on Thain, who had replaced the ousted O'Neal. “There is no doubt in our minds, that if called upon, Bob McCann would be an outstanding leader of this firm,” the letter writers said.

But not every advisor at Merrill saw McCann as an outstanding leader, according to several people close to Merrill. That should come as no surprise: You can't please everyone. Critics describe a side of McCann sharply at odds with his popular public image. “Brokers didn't like him,” claims Mindy Diamond, president of headhunter Diamond Consultants. “I don't think they were sad to see him go.”

The day after he announced his retirement, McCann's successor was named: Daniel (Dan) C. Sontag, 52, who had reported to McCann as head of the Americas region for Global Wealth Management. It was the first time in nine years a broker had been put in charge of the business. Sontag, a 30-year veteran, joined Merrill as a financial advisor in the Colorado Springs office in 1978.

“For someone who did not spend a lot of time in wealth management, Bob did very well,” said one well-informed Merrill executive, speaking on the condition of anonymity. “Bob was not an advisor. Dan is one of them and it really calmed a lot of people down when the announcement of his appointment came out.”

Sontag's appointment certainly soothed nerves among advisors at Merrill. Putting a Merrill man in charge of the combined brokerage was a smart move. BofA's small brokerage, employing some 2,000 reps, clashed with Merrill's, where advisors offer a more sophisticated service and where compensation was superior. Tensions surfaced over terms of retention bonuses. By November, about 6,000 Merrill brokers accepted BofA's retention package, which included most of Merrill's biggest producers, who generate annual revenues in excess of $1.75 million each. But the controversial deal excluded at least half of Merrill's brokers, who were not eligible because of production numbers. Still, McCann defended his role in shaping the package. “It's pretty gratifying to all of us,” McCann told a reporter in November. “We did a good job of putting together a transition award package that was fair and appropriate.”

But that's not how one advisor saw it. “If you have six kids in the family, and you say you are only going to reward the best three, what incentive do the other three have to work harder?” snapped this advisor, who did not get a retention package. Anger over the retention packages surfaced in one chatroom. “One thing is for sure, McCann and Sontag have clearly demonstrated their loyalty to [BofA CEO] Ken Lewis and not the FAs. Screw them,” read a post.

All the same, the retail brokerage unit made impressive strides during McCann's five-year term as head of GWM — so much so that BofA's Lewis referred to it as the “crown jewel” of Merrill. Revenues in GWM grew to $14 billion in fiscal year 2007, up by 62 percent from fiscal year 2003. Pre-tax margins rose to 25.9 percent from 16.8 percent over the same period. The advisory force, meanwhile, grew to 16,740 from 13,530.

At an industry conference last September, McCann proudly presented his group's strong performance versus industry peers. Annualized net revenue per Merrill advisor was around $900,000, compared to under $725,000 for peers; client assets per advisor at Merrill were in excess of $100 million compared with $80 million for peers. (The figures exclude Merrill trainees.)

Critics carp that McCann was in the right place at the right time: He ran the brokerage during a period of rising global prosperity, and a strong stock market. By September last year, the credit markets were in convulsions and so was Merrill — to the tune of $52 billion in losses and writedowns. Last year closed on more horrible news for Merrill: U.S. client assets had shrunk to $1.1 trillion, a 30 percent decline compared with 2007. And Merrill lost about three percent of its advisors, which numbered 16,090 by year-end.

After he returned from family celebrations and packed on some weight over Christmas, say colleagues, McCann had his departing script prepared. His Jan. 5 exit was announced, via an internal memo from Thain, who quoted McCann: “Bob told me: ‘After much reflection and deliberation, I have decided that this is the right time for me to move on. This was not an easy decision; my time at Merrill Lynch has enriched my life both professionally and personally. I'm proud to have been part of such a great company, and I feel fortunate to move forward with treasured friends and memories.’”

ROBERT J. McCANN, THE MERRILL MAN

Bob McCann, 50, a native of suburban Pittsburgh, spent 26 years at Merrill in several roles. In 1982, after graduating from Bethany College and earning an MBA at Texas Christian University, he joined as an equities salesman. He later ran the U.S. Equity business and Merrill's Global Equities Markets. He was head of Global Securities Research and of the Global Institutional Client division. In early 2000, McCann was named COO of Global Markets and Investment Banking. Then in 2003, he left Merrill for a job as vice chairman at AXA Advisors, but was brought back by then-CEO Stan O'Neal. In 2005, McCann took the reins as vice chairman and president of GWM.