Yes, O'Neal has an MBA from Harvard Business School. Yes, he was helped along the way by David Komansky, former CEO of Merrill who recognized his potential and groomed him as a successor. But O'Neal has traveled an unconventional route to the top: not many other top bankers can peer down from their penthouses and recall a childhood spent on the wrong side of the racial divide in 1950s Alabama.
As the grandson of a slave, O'Neal's banking career began very differently to most. He didn't hit the industry until he was 36: today's MBAs usually arrive around ten years earlier. And he didn't spend his formative years as a strategy consultant or training with a rival bank: O'Neal's background was in industry. When he walked into Merrill he was fresh from the role of assistant treasurer at General Motors (GM) in New York. He started out as foreman at the GM factory in Doraville, Georgia, working the 4pm to midnight shift.
If it's a long way from the production line in Georgia to the role of one of the most highly paid men on Wall Street, it's further still from Alabama. 'I remember picking cotton in the fields,' O'Neal told conference delegates in 2002, 'I remember attending a 'separate but equal' school - a one-room schoolhouse for all blacks of all ages in our area, with one teacher for all grades. I remember segregated restaurants and theaters and bathrooms. All of them separate, but none of them equal.'
Going to Harvard provided a boost. When O'Neal's father left the cotton fields for a job on the General Motors' production line, his son got the chance to attend the General Motors Institute (now Kettering University). Several years, and the job as a factory foreman later, GM paid O'Neal's way through the most prestigious business school in the U.S.
From B-school to banking
His banking break came several years after Harvard in 1986, when O'Neal joined Merrill as a director (read vice president) in the investment bank. In doing so, he followed Courtney F. Jones, a former treasurer at GM, who joined Merrills in 1985, becoming chief financial officer (CFO) and a member of the board of directors.
Jones was a big hitter from the start, but O'Neal's early years at the bank were spent in relative anonymity. Nonetheless, when promotions came, they came thick and fast: 1991 to 2003 passed in a whirlwind of bigger and better roles. In 1991 O'Neal was made managing director in charge of high-yield finance and restructuring. In 1995 he became head of the capital markets group with responsibility for Merrill's global debt and equity new issue activity. In 1997 he became co-head of the corporate and institutional group (now known as global markets & investment banking), as well as joining the board as executive vice president.
If all those quick fire promotions weren't sign enough in themselves, the first real indication that O'Neal was headed for the top came in 1998, when he was made CFO (an invitation he apparently responded to by telling Komansky he'd never even looked at the balance sheet). In 2000 he was made president of the US private client group, with responsibility for Merrill's 14,000 US brokers. In 2001 his fate was sealed when he was made president and chief operating officer (COO). By December 2002 O'Neal was chief executive of Merrill Lynch. Four months later, he became chairman, too.
How did he do it?
What does it take to reach the top of one of the world's premier financial institutions? Well, you need to be smart: O'Neal graduated in the top 20% of his class at the General Motors Institute. You need to put in some hard grist: former colleagues at GM told BusinessWeek that O'Neal was in the office until 10pm every night. It helps if there are visible signs of your success: under O'Neal's guidance, Merrill ranked number one in U.S. domestic high-yield issuance between 1991 to 1994; as CFO he helped successfully steer the bank through the near 1998 collapse of Long Term Capital Management, a hedge fund with losses of more than $4 billion, whose potential demise threatened to unhinge the world's financial system.
It also helps if you can play politics. O'Neal's passage to the top was prepared by Komansky, who announced him as his successor in 2002. O'Neal was quick to stamp his authority on the firm. Jeff Peek, O'Neal's principal opponent for the position left for CSFB in 2001. Arshad Zakaria. head of global markets and investment banking, left in 2003, along with Thomas Patrick, former chairman, after a row over a plan to propose Zakaria as O'Neal's successor. A host of other rivals have also disappeared, including Winthrop Smith, former president of the international brokerage group.
If raw determination is what makes a banking career, O'Neal seems to have it in spades. At Merrill, his staying power has paid off: between 2001 and 2003 he oversaw 24,000 redundancies; pre-tax profit margins rose from 22% to 28% in the process.
But ruthlessness alone does not make a great banker. According to O'Neal it's also a question of enjoying what you do and doing it well. 'I think life is about doing the best that you can with what you are born with,' he told a Harvard alumni publication. 'It's a fascinating journey to discover what that is.'