David Komansky, a college dropout who joined Merrill Lynch & Co. as a stockbroker and expanded the firm around the globe as chairman and chief executive officer during the bull markets of the 1990s, has died.
Komansky died Monday at 82, according to Jenn Komansky, one of his daughters. “The only thing I can say is that he was a wonderful husband and father, a wonderful friend, and everybody loved him,” she said.
As CEO from December 1996 to December 2002, Komansky added to Merrill’s network of retail brokers in Japan, Canada and Australia, making the firm’s share of revenue from non-U.S. sources higher than at any of its Wall Street competitors. When the stock market tumbled beginning in 2000, he faced criticism for having ballooned the company’s workforce to 72,000. He watched as his designated successor, Stanley O’Neal, slashed 25,000 jobs.
In 2002, Komansky agreed to step aside earlier than planned to let O’Neal become CEO. Under O’Neal, Merrill would build a huge bet on the subprime-mortgage market that ultimately led to crippling losses and the end of its run as a standalone firm.
The sale of Merrill to Bank of America Corp. in September 2008 “broke my heart,” Komansky said in a 2010 interview with Bloomberg Television. He said he regretted supporting the 1999 repeal of Glass-Steagall, the law that had previously kept depository banks separated from institutions involved in capital markets.
“Dave personified the classic self-made Merrill Lynch leader, rising through the ranks to become a prominent figure in the world of international finance,” Merrill Lynch Wealth Management President Andy Sieg, who was an assistant to Komansky from 1998 to 2000, said in a note to employees. “His distinctive intellect and remarkable charisma made him popular with clients, colleagues and associates of all backgrounds, from retail investors to heads of state.”
Komansky was “the epitome of the old-school financial adviser: friendly and personable, a great cheerleader for a growing company, but lacking the technical skills needed for a downturn in the financial markets and the strategic vision to navigate the complexities of an interconnected world of capital markets and global finance,” according to “Crash of the Titans,” a 2010 book about Merrill’s collapse written by Greg Farrell, now a reporter at Bloomberg News.
A “great bear of a man” with “a backslapping and gregarious nature,” as the New York Times put it in 2003, Komansky was the firm’s first Jewish CEO, after a long line of Irish Catholics. He praised Merrill as “a meritocracy” and advanced that ideal by helping to groom O’Neal, who in 2002 became the first Black CEO of any major Wall Street firm.
Komansky “was a larger-than-life figure, with a tremendous sense of humor,” Paul Critchlow, Merrill’s head of communications and public affairs when Komansky was CEO, said in an interview Tuesday. “He was a great people person -- so good at winning people over and making them feel like one of the gang.”
Global Expansion
Komansky’s buying spree augmented Merrill’s mostly U.S.-focused investment bank and retail brokerage. From the end of 1996 to the end of 2000, Komansky increased Merrill’s workforce by 19,000 employees, or 35%. Acquisitions included Mercury Asset Management, the No. 1 U.K. fund manager, for $5.3 billion; Yamaichi Securities Co., a failed Japanese brokerage; Midland Walwyn Inc., Canada’s last major independent brokerage, for about $780 million in stock; and a 51% stake in Phatra Securities, Thailand’s largest investment bank.