Merrill Lynch President to Step Down

Merrill Lynch & Co. President Herbert M. Allison Jr. will retire after he was told he wouldn’t get the top job at the biggest U.S. brokerage firm.

Chairman and Chief Executive David Komansky told Allison, 55, Saturday that the board decided he wouldn’t be considered as an eventual successor to Komansky, a person familiar with the firm said. Allison then chose to retire after 28 years at Merrill.

Allison’s appointment in December 1996 as president and chief operating officer, the No. 2 post, surprised some executives because he was never a broker. A philosophy major at Yale University, Allison is reserved and detail-minded, a contrast with the gregarious Komansky and his predecessor, Daniel Tully, who spent decades as salesmen.

“This was a man who was very different from the typical Merrill guy,” said Steve Eisman, an analyst at CIBC World Markets. “They’re brokers, they clap you on the back. This guy was a real cerebral intellectual. They didn’t want to have that type of personality as head of the company.”

The firm has no immediate plans to name a new president and chief operating officer, Komansky said.

Merrill said Komansky, 60, will have direct responsibility for the executives in charge of the firm’s day-to-day operations.

Merrill shares rose 81 cents to $77.88 on the NYSE.