The sudden and harsh ouster of Thomas H Patrick Sr as Merrill Lynch's executive vice chairman last week, may spell bad news for India-born Arshad Zakaria, who is head of institutional banking and securities business at Merrill, said the New York Times in a report.
In dismissing Patrick, E Stanley O'Neal, Merrill's chief executive officer, has sent a strong message: that he intends to run the bank his own way and not in the traditional manner in which the investment bank has been run all these years.
O'Neal's move to consolidate his power in the institution may, however, put Zakaria in an awkward position, as the ousted Patrick had always advocated that Zakaria be made president and should be the eventual successor to O'Neal.
Analysts say that by dismissing Patrick, O'Neal has not only rejected the choice of Zakaria, but also proved that he can be a ruthless executive. After all, O'Neal owes his job to Patrick, said the NYT.
In recent weeks, Patrick had started calling board members behind O'Neal's back, says NYT, to push for Zakaria's appointment as president. It was then that O'Neal took action.
Analysts, however, said that they would not be surprised if Zakaria had already started making plans to move on from Merrill. Zakaria, for the moment, runs the major profit centre at Merrill
Merrill Lynch spokesman declined to comment, said the newspaper.
The NYT said that most analysts, however, found Zakaria choice for president. "While Zakaria runs a major profit center for Merrill, he has been in his position for less than three years and has no other significant operating experience within the firm. At 41, he is one of the youngest people to head a securities division at a big Wall Street firm," said the NYT.
The daily, quoting bankers familiar with Patrick's reasoning, said that Patrick was pushing hard for Zakaria as he and O'Neal had an understanding: Patrick and Zakaria would support O'Neal for chief executive so long as O'Neal would then choose Zakaria as president.
The events of the last week make clear that the supposed bargain fell apart, said the newspaper.
Zakaria and Patrick, the newspaper said, had struck numerous deals together. They know each other since the mid-1980s, when Zakaria joined Merrill fresh out of Harvard Business School. Zakaria's quantitative skills appealed to Patrick, who ensured Zakaria's rapid ascent through the Merrill ranks.
