Former Merrill boss gets $161.5m

Mr O'Neal had been chief executive since 2001

Departed Merrill Lynch chief executive Stan O'Neal is to pocket a retirement package worth $161.5m (£78m).

Mr O'Neal, who retired with immediate effect on Tuesday, is getting $131.4m in stocks, $24.7m of "retirement benefits" and $5.4m in compensation.

His departure follows after the bank was forced to admit a $7.9bn exposure to bad debt in the US housing market.

Mr O'Neal has been widely criticised for allowing the firm to become so over-exposed to the housing downturn.

Sub-prime securities

Under the 56-year-old's leadership, Merrill was one of the first banks to repackage risky US sub-prime mortgage debt into tradable securities.

As mortgage defaults in this sub-prime sector hit record highs over the past year, on the back of higher US mortgage rates, the value of these securities plummeted.

Merrill's $7.9bn write-off contributed to the firm last week posting a third-quarter net loss of $2.3bn, its worst financial performance since 2001.

Compensation expert James Reda told the Associated Press news agency that he wondered whether Mr O'Neal would have many regrets.

Mr O'Neal now has so much money that he would be "basically indifferent", speculated Mr Reda.

Merrill said board member Alberto Cribiore would now chair a search committee to find a replacement for Mr O'Neal, who had been chief executive since late 2002 and chairman since 2003.