A Golden Handshake

If the Merrill Lynch board votes to show Stanley O'Neal the exit door, how big will his last check be? It all depends on how the board spins it.

According to the company's most recent proxy filing, if O'Neal is terminated without a change in control of Merrill Lynch, it will be up to the board's compensation committee to determine his severance pay.

But life would have been very sweet if O'Neal's job had been terminated after a change in control of the company. Based on his 2006 compensation package, O'Neal would have walked away with severance benefits of $29.5 million, and accelerated stock compensation of $221.8 million, if the company's control changed.

What if the overture to Wachovia had led to a merger? Wachovia is the bigger of the two companies, but it's not clear that a deal would have triggered a change in control provision. Still, $251 million is certainly big enough to drive a person to at least ask.

O'Neal has been among the better compensated Wall Street executives in recent years. He received $48 million in 2006, up 40 percent from the salary, stock, and bonus he got in 2005, although short of the $54 million that Lloyd Blankfein of Goldman Sachs earned.

If the board spins his departure as an early retirement, O'Neal could still walk out with enough to keep his head high. The chief executive was 55 as of the March 2007 proxy filing, which is precisely the age at which the Merrill Lynch board permits executive retirement with benefits. He would be entitled to a $24.8 million pension benefit, in addition to the $4.8 million in non-qualified deferred compensation he's accumulated.

Megan Barnett