There was a time when it didn’t matter what faculty you went to or whether or not you had a elaborate MBA. For those who had been good and hungry, you would have a profession on Wall Road — and even run a giant agency.
Dave Komansky, the previous longtime CEO of Merrill Lynch, who epitomized that largely forgotten half Wall Road, died Monday of pure causes. He was 82.
What I’ll at all times bear in mind about Dave: his thick Bronx accent and the way he might relate to anybody — one thing that may’t be taught at enterprise faculty. Purchasers beloved him, individuals appreciated working for him. And Dave by no means completed school as a result of he didn’t must.
He knew how Wall Road labored and he might translate that data to assist individuals make investments as the most effective brokers within the Merrill Lynch system. He carried that persona from the small workplace in Queens the place he obtained his begin as a dealer trainee by way of to the Merrill govt suites, ultimately turning into CEO in 1996.
Amid all this success, Komansky by no means forgot his roots, or the agency’s founding ideas. Underneath Komansky, Merrill would turn out to be a big, diversified funding financial institution. But it surely continued to be outlined by its “Thundering Herd” of monetary advisers — a agency largely centered on shelling out market recommendation to small traders from brokerage places of work in giant cities and small cities throughout America.
Merrill would additionally stay outlined by one other considered one of its traditions, one thing that dates again to days of Charlie Merrill. It’s the idea referred to as “Mother Merrill” — a brokerage agency that truly cared about its individuals.
Whereas different CEOs appeared to luxuriate in mass layoffs (and the surging inventory worth that usually adopted) Merrill beneath Komansky thought of downsizing a final resort. In 1998, when financial institution mergers had been all the craze, Dave refused to promote Merrill to JP Morgan as a result of he couldn’t abdomen seeing what he known as the “elevator people” getting fired as they smashed the 2 giant corporations collectively.
These had been the common women and men who Dave noticed recurrently within the elevator — and who Dave thought of household.
“Dave knew the first names of top executives, brokers and janitors,” mentioned his longtime pal Dick Grasso, the previous head of the New York Inventory Alternate. “He cared about his family first, but his family wasn’t just blood relatives; it was also his family at Merrill Lynch.”
Dave labored at Merrill for 35 years. It by no means shocked me that only a few years after he left as CEO in 2003 following a nasty boardroom coup d’état, the agency imploded. In hindsight, the rationale was apparent: It began to worth threat and income over the individuals Komansky took the elevator with.
After all, Dave had his blind spots (as all of us do). Towards the tip of his tenure as CEO, he trusted the fallacious individuals. His consideration to element had waned (associates would say due to a continual again downside). Income at Merrill fell behind these at corporations like Goldman Sachs.
New administration got here in and centered on being extra like Goldman versus embracing Charlie Merrill’s imaginative and prescient of “bringing Wall Street to Main Street.”
Merrill loved a couple of years of souped-up buying and selling income because it embraced Goldmanesque buying and selling threat till it turned clear that threat additionally has its downsides. Like most of Wall Road, Merrill was on the verge of extinction in 2008 in the course of the throes of the monetary disaster. It was saved due to a authorities bailout and since Financial institution of America couldn’t wait to get its palms on the brokerage crown jewel.
Right this moment, the risk-taking a part of Merrill is gone, however its “Thundering Herd” of brokers continues to thrive.
Once more, Dave had his blind spots, however nobody might ever query his honesty, integrity, his respect for shoppers and love of Merrill, notably these “elevator people” who’ve made the Thundering Herd considered one of Wall Road’s nice corporations.