Merrill's Markets, Banking Group to 'Flatten' Structure

After a high-level departure, Merrill Lynch is writing a new chapter in Wall Street's playbook for keeping senior investment bankers from jumping ship.

Merrill is expected to announce this week a "flatter" leadership structure for its Global Markets & Investment Banking division, according to the Financial Times. Merrill announced May 16 that Dow Kim, co-president of the division since 2003, will leave by the end of the year to start a hedge fund.

Greg Fleming, who had led the markets and investment banking unit alongside of Kim, has been named co-president and chief operating officer of Merrill Lynch.

Rather than name a new head or co-heads of markets and investment banking to, the FT reports that CEO Stan O'Neal "is expected to spread leadership of the division among a wider group...Under the new structure, product and geographic responsibility is expected to be divided" among four to six leading executives.

They include Jason Brand, head of Merrill Lynch Pacific Rim; Rohit D'Souza, head of global equities, markets in the Americas, and alternative investments; Andrea Orcel, global head of financial institutions; and Osman Semerci, global head of fixed income, currencies and commodities. Orcel and Semerci also share leadership of the Europe, Middle East and Africa region.

Since Kim and Fleming took over as co-heads of global markets in August 2003, the unit added more than 2,500 people and boosted its contribution to Merrill's top and bottom lines. Kim, a former trader, earned $37 million in compensation last year, making him one of Merrill's highest-paid executives.

His exit indicates that the exodus of Wall Street stars to pursue still greater riches running hedge funds has by no means halted - even if it has slowed, as recruiters have told us lately.