(Bloomberg) – David Komansky, a college dropout who joined Merrill Lynch & Co. as a stockbroker who expanded the company as chairman and chief executive officer worldwide during the bull market of the 1990s, has passed away.
Komansky died Monday at the age of 82, according to Jenn Komansky, one of his daughters. “All I can say is that he was a wonderful husband and father, a wonderful friend, and everyone loved him,” she said.
As CEO from December 1996 to December 2002, Komansky expanded Merrill’s network of retail brokers in Japan, Canada and Australia, making the company’s revenue share from non-US sources higher than any of its Wall Street competitors. When the stock market collapsed in 2000, he was criticized for increasing the company’s workforce to 72,000. He watched his designated successor Stanley O’Neal cut 25,000 jobs.
In 2002, Komansky agreed to step down earlier than planned to leave O’Neal as 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 his career as a stand-alone company.
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 previously separated custodians from institutions operating in the capital markets.
“Dave embodied the classic self-made Merrill Lynch leader who became a prominent figure in the world of international finance,” said Andy Sieg, president of Merrill Lynch Wealth Management, who was Komansky ‘s assistant from 1998 to 2000 Note to employees. “His strong intellect and remarkable charisma made him popular with customers, colleagues and employees of all backgrounds, from private investors to heads of state.”
Komansky was “the epitome of the old school financial advisor: friendly and personable, a great cheerleader for a growing company, but without the technical skills required for a financial downturn and the strategic vision to handle the complexities of a connected world “. capital markets and global finance, ”said Crash of the Titans, a 2010 book about Merrill’s collapse, written by Greg Farrell, now a Bloomberg News reporter.
A “great bear of a man” with “a backward and sociable nature,” as the New York Times 2003 put it. Komansky was the company’s first Jewish CEO in a long line of Irish Catholics. He lauded Merrill as “an achievement society,” and promoted that ideal by helping O’Neal, who in 2002 became the first black CEO of a major Wall Street company.
Komansky “was a larger than life character with a tremendous sense of humor,” said Paul Critchlow, Merrill’s director of communications and public affairs when Komansky was CEO, in an interview Tuesday. “He was a great person – so good at winning people over and making them feel like one of the gang.”
Komansky’s buying spree fueled Merrill’s mostly US-focused investment banking and retail brokerage. From late 1996 to late 2000, Komansky increased Merrill’s workforce by 19,000, or 35%. Acquisitions included Mercury Asset Management, the UK’s leading fund manager, for $ 5.3 billion; Yamaichi Securities Co., a failed Japanese broker; Midland Walwyn Inc., Canada’s last major independent brokerage firm, for approximately $ 780 million in equity holdings; and a 51% stake in Phatra Securities, Thailand’s largest investment bank.
In the ensuing bear market, Merrill plunged from $ 80 per share in January 2001 to $ 28.43 per share in October 2002, and the company cut back on operations in Japan and Canada. Komansky said the decline was the worst of his career.
“I used to think that this shouldn’t be repeated from the early ’70s, and I felt very comforted,’ Well, I had that at the beginning of my career and I’ll never have to go through it again. ‘”He said in an interview in 2002. “I was wrong. This one turned out to be much more devastating.”
Also in 2002, the company suffered a black eye when New York Attorney General Eliot Spitzer investigated how Wall Street firms used stock research to win investment banking deals. Spitzer’s report classified Merrill’s investment advisory service as “tainted” and said the company must disclose when the subject of the research is an investment banking client or prospect. Merrill eventually agreed to pay $ 200 million as one of 10 companies to settle allegations of biased research.
At the company’s April 2002 annual meeting, Komansky apologized for emails from some of the company’s research staff, including Internet analyst Henry Blodget, privately denigrating stocks recommended in public reports to investors.
Komansky’s plan to remain CEO until his 65th birthday in 2004 was thwarted by O’Neal’s rapid rise in power. After the terrorist attacks of September 11, 2001, in which three Merrill employees were killed and the headquarters in Lower Manhattan was damaged, O’Neal quickly cut expenses and staff as president. Komansky resigned from the post of CEO at the end of 2002 and resigned as chairman in April 2003.
David Herman Komansky was born on April 27, 1939 in Mount Vernon, New York, to one of two boys to an Irish Catholic mother who converted to Judaism after marrying her husband, a postal worker. Komansky grew up in the Bronx.
In 1956, after graduating from high school, the family moved to Miami, where Komansky attended Miami Dade Junior College. In 1968, after dropping out of the University of Miami, the 29-year-old was doing odd jobs when his future wife’s father helped him find a job as a real estate agent in Merrill’s Forest Hills, New York office.
Komansky “never forgot where he came from,” Critchlow said.
Komansky ran the company’s Manhasset, New York office from 1977 to 1981 and was known for ringing the bell on a major broker sale. He was also known for the full-necked laugh that emanated from his 6-foot, 4-inch body.
The promotions continued: Midwest Regional Director, New York Regional Director, National Sales Director for the Retail Group in 1988, Chief of Equity Sales in 1990, Head of Debt Markets in 1992, and Executive Vice President, Debt and Equity Markets in 1992 1993.
In January 1995, then CEO Daniel Tully appointed Komansky as President, Chief Operating Officer and his likely successor. Tully died in 2016.
Komansky and his wife Phyllis had two daughters, Jennifer and Elyssa, and two grandchildren.
(Updates with details on Komansky’s career from paragraph six.)
– With the support of Max Abelson.