Merrill Rewards CEO for Record ProfitsMerrill Rewards CEO for Record Profits

John Churchill

Merrill Lynch handed CEO Stanley O’Neal his biggest paycheck ever in 2003—$28.14 million.

According to the company’s 2004 proxy statement, O’Neal’s massive compensation is due to the company’s superior performance in 2003. Merrill tallied $4 billion in profits and improved revenue during tough market conditions. The increase is “based on a year-end assessment of Merrill Lynch’s performance,” the proxy says.

Though the figure is nearly double the $15.3 million O’Neal made in 2002, it falls short of the $32.5 million retired Chairman David Komansky’s pulled in for 2000.

O’Neal’s compensation package is the second largest reported this year (behind Bear Stearns CEO James Cayne’s $39 million, which includes a $12 million “long-term award). But O’Neal still took home a good deal more than Goldman Sach’s Hank Paulson ($21.4 million) and Morgan Stanley’s Phil Purcell ($14 million).

Allen Johnson a compensation expert with New York-based Johnson Associates says O’Neal’s pay was a departure for Merrill, which typically delivers lower executive pay than its peers.

Merrill, whose stock rose 55 percent in 2003, “had a good year, and the board wanted to send a message that they have a lot of confidence in him,” said Johnson.

Compensation among the other top executives, however, appears to have retreated a bit, according to the proxy statement. James Gorman, head of Merrill’s private client group, was the only other Merrill executive from 2002’s best-paid list to show up again in 2003, earning $11.1 million.