Tuesday, September 11, 2007

Merrill Lynch - Human Resource Management


1. Reimbursement Purgatory - Merrill Lynch uses Captura Software's Employee Payables human resources management software - Company Operations
Nov, 1998

Firms such as Merrill Lynch and Ford Motor Co. are rolling out corporate credit cards and automating the reimbursement process.

At Merrill Lynch, managers constantly had to make large cash advances to junior employees, says Heidi Evenson, a former business manager, now VP and manager of business technology for the investment banking division. Moreover, expense reports took three months to clear, often missing the 90 day SEC window the firm had to bill clients for expenses relating to initial public offerings.

Now, Employee Payables, an online travel and entertainment (T&E) management system from Captura Software Inc., Bothell, Wash., is changing all that. Merrill Lynch gets a daily feed from American Express, so when one of the 1,000 employees currently using the intranet-based software hits a T&E link in their browser, a Microsoft SQL server running Captura software pushes expense data down to them. Users can quickly mark up their expenses. Once submitted, expenses are subject to a complex, hierarchical rules engine, which sits on the back end. Then, the server routes approved expenses to managers for sign-off.

Thanks to recent IRS rulings, electronic data can often substitute for physical receipts, making systems like this possible. "As of now the intranet hasn't been used to support transaction-level data that's used to support a financial system," says DanaBruttig, president and CEO of Captura.



2. "Merrill Lynch Cuts Health Costs, Creates a Generous Benefit Plan"
by Carol Gentry
May 23, 2000, The Wall Street Journal

"There are health plans, and there are health plans. And then, there is Merrill Lynch & Co.'s health plan.

By just about any standard, the financial-services giant is generous in what it covers. For example, it sets no limits on how long its employees can get care in a mental hospital -- an approach virtually unheard of elsewhere.

The company regularly retools its coverage to accommodate special needs. For a secretary rendered mute by Lou Gehrig's disease, it approved a synthetic speech machine that costs $6,000.

Early Detection
Even when Merrill Lynch turns down a request, it can do so in an unusually forgiving way. A disabled former employee suffering from multiple sclerosis asked Merrill to cover construction of a large swimming pool, so he could get exercise therapy. Can't do that, Merrill said, though we will cover a pool 4 feet by 6 feet.

But here's the really odd part: The company says its approach appears to be saving money. Adjusted for inflation, its health costs have declined even while benefits have expanded. And Merrill spends less per employee than many similarly sized companies. In fact, a half-dozen other corporations have copied its health plan, and the government will run a pilot project of it for thousands of federal workers this summer.

The story of how the nation's largest investment firm built its own benefits program rather than use an off-the-shelf plan challenges many of the assumptions that led employers into managed care. Instead of controlling costs by restricting employees' access to specialists or brand-name drugs, Merrill says it saved money by focusing on the quality of care and early detection.

The Company's Role
The company's experience also illustrates a fact that gets lost in the managed-care debate: If you work at a big company, it's probably your boss, not your HMO, who calls the shots. While small employers usually have to buy a standard health plan with preset limitations, large companies can act as their own insurer. They can make decisions about coverage and hire an insurer to act as the middleman and pay the claims.

Many corporations are content to delegate authority over the scope of coverage to insurance administrators, says Kenneth J. Reifert, director of global benefits for Merrill Lynch. 'They want to distance themselves from a tough decision.'

Merrill Lynch's different route dates back to 1987, when William Schreyer, chief executive at the time, underwent open-heart surgery. Shortly thereafter, he brought in a young cardiologist, Lonny Reisman, to screen Merrill executives for heart problems.

Soon after Dr. Reisman arrived, he met with Herbert Allison Jr., who was then Merrill's head of human resources and later became its president. Mr. Allison asked Dr. Reisman his opinion of the company's cost-containment strategy. 'I think it stinks,' Dr. Reisman says he told him. 'You're completely missing the point. It isn't about resource consumption, it's about clinical excellence.' He suggested that if Merrill focused on improving quality of care, the company could solve its cost problems.

Mr. Allison introduced him to the then-director of health benefits, Mr. Reifert, and the two visited insurance contractors nationwide, conducting random audits of staffers' medical care. Records showed employees with untreated sky-high blood pressure or out-of-control glucose levels. Some Merrill employees had spent days in the hospital being treated for the wrong disease. Ominous results on screening tests weren't always followed up.

'A Blank Check'
Meanwhile, insurers' prices were soaring. 'We were giving them a blank check,' Mr. Reifert says. He and Dr. Reisman tried to recruit HMOs as partners for a quality-improvement project. But they couldn't get the HMOs' attention.

So Merrill formed a coalition with other major employers to lobby health plans to put more emphasis on monitoring quality. The bird dogs for the group were Dr. Reisman, who by now was a full-time consultant to Merrill employed by the William M. Mercer consulting company, and his colleague at Mercer, Charles Blanksteen.

The two started a company to serve as an incubator for the quality-improvement project. With encouragement and money from Merrill and venture capitalists, the firm evolved to become the closely held Active Health Management Inc.

They began by examining the treatment given to Merrill employees and dependents who had generated more than $50,000 in claims in a year. They checked on whether those patients had been properly diagnosed, were being given the best possible treatment (whatever the cost) and were being monitored properly.

When the answer was no, the patient's doctor would get a call from a Merrill medical consultant with a few tactful suggestions. Then, Dr. Reisman would check on the patient from time to time.

But Active Health and Merrill Lynch managers concluded they needed to intervene much sooner -- not after a heart attack, but when a patient with angina went untreated; not after a stroke, but when a patient failed to fill a prescription for blood-pressure medicine. What they needed was computer software to alert them to danger signals, so they could alert the patient's physician. Active Health developed a program that could take in data from throughout the system -- doctors, laboratories, hospitals and pharmacies -- and flag mistakes, misdiagnoses and disasters waiting to happen.

Next, Merrill needed a national insurer to handle payment of bills and follow up on hazards the computer flagged. The big insurers declined, but there was another possibility: String together Blue Cross and Blue Shield networks across the country, under the leadership of Empire Blue Cross and Blue Shield of New York. Michael Stocker, Empire's CEO, was enthusiastic.

Merrill Lynch officials decided that while Empire would handle bill payment, they would determine what the coverage should be. The company said it would abide by the principle of following the advice of the best medical experts.

That strategy sometimes puts the company in a lonely position. Most insurers, for example, don't cover behavioral therapy for children with autism, saying it's the province of education, not health care. Merrill Lynch covers the treatment in some early cases where experts say such therapy can bring lasting improvement.

Merrill Lynch doesn't coerce patients into taking a generic drug if the doctor wants them to have a brand name. 'We want patients to get what the doctor is prescribing,' says Shari Goldfarb, a vice president for global benefits.

When Viagra came out, the company that manages Merrill's prescription-drug program called Mr. Reifert's staff to say that a lot of companies weren't covering the anti-impotence drug. After checking with Active Health, Merrill gave the go-ahead. 'Impotence is a medical condition,' says Louis DiMaria, vice president and manager of international benefits planning. "So we're covering it. Simple."

Merrill Lynch's plan sets no arbitrary limits on the number of home-health visits or the number of days for inpatient hospital care for mental health, substance abuse or rehabilitation. Coverage remains at 100% as long as doctors consider the treatment medically necessary and the patient is improving.

Most insurers set caps on those services because they have been overused by hospitals and because the treatment for such problems wasn't clear-cut. But Mr. Reifert says it's now clear that psychiatric problems can stem from biochemical irregularities. So why would the company cover them differently than physical ailments?

It doesn't make sense to kick patients out of the hospital when they're making progress, adds John Brence, a vice president for global benefits. The same logic governs home visits, he says. If there are set limits, "sooner or later, somebody's going to need care beyond that," he says. "And if they don't get that care, they're going to get sicker and end up going back to the hospital."

Merrill Lynch insists it knows where to draw the line. When some New York employees asked for acupuncture coverage, the staff and its Active Health physicians said OK -- but only if it's done by an acupuncturist with traditional medical training.

When a request came in for a new type of mammogram that was still being tested, Active Health suggested Merrill say no. There were still too many problems to trust its reliability, they said.

Employees who aren't satisfied with answers from benefits managers can appeal to a panel from Merrill's human-resources staff. But employees say Merrill goes to extraordinary lengths on their behalf. Once, Merrill sent a Learjet, staffed with a surgeon, from Germany to Kenya to pick up a manager's desperately ill wife stricken while on vacation with a blood clot on the brain. Mr. Reifert blanched at the price -- almost $100,000 -- but paid it at the recommendation of Merrill Lynch's medical director, Donald Gemson, who decided that Kenya and neighboring countries lacked the imaging equipment and experienced surgeons required to the treat the problem. The patient recovered.

Employees have heartily endorsed Merrill's health plan and its quality-monitoring system, tested in 1998 and fully implemented in January 1999. In the mid-1990s, many of them had gone to managed-care plans to get away from deductibles, paperwork and coverage of only 80% of the bill. But when they heard that the new Merrill plan had none of those features, and still covered three out of four doctors and nine out of 10 hospitals, they jumped back in. Now 80% of the company's employees are on the new plan.

Insurance industry groups say that HMOs and other insurers have already used technology to develop quality-monitoring systems, and private employers don't need their own system. "This isn't anything new," said Charles N. Kahn III, president of Health Insurance Association of America.

But Active Health says the Merrill system is far ahead of the usual insurance company efforts because it focuses only on quality, not on cost, and because it has such a huge database. Thus, Active Health was warning doctors about drug interactions and other risks with the heartburn drug Propulsid more than a year before the manufacturer acknowledged them and pulled it off the market in March.

In some ways, Merrill's generous coverage is an extension of similar policies that go back decades. The company opened its first on-site health clinic more than 50 years ago, and it now has clinics at 10 Merrill locations, designed to save workers time and increase the chance that problems will be detected early.

Karen Scales, who works in Merrill's New York headquarters, saves about four hours a month by getting her allergy shots downstairs. But she values the clinic for more than convenience: Her first skin cancer was spotted there, and she was referred to Memorial Sloan-Kettering Cancer Center, which has now removed three. Ms. Scales says she "never, ever would have gone" for screening if it hadn't been so convenient.

While the clinics rang up 80,000 visits last year, they account for less than 2% of Merrill's $130 million a year in medical spending. The lion's share goes into the health-insurance system.

So what evidence is there that Merrill's approach saves money? The company's medical cost per employee last year, including workers' own contributions, was roughly $3,600 -- about 25% less than the average found in a benchmarking study of 54 large employers by the Towers Perrin consulting company last summer.

Merrill Lynch has fewer retirees to cover than many large corporations, such as auto makers, Mr. Reifert says, so it's possible there are other factors at work. But he also notes figures that show Merrill Lynch's health insurance costs per capita dropped slightly between 1995 and 1999, when adjusted for medical inflation during that period.

The company also has found that the rate of large claims (more than $50,000) has been steadily declining. There were 2.2 claims per 1,000 people covered in 1999, vs. 3.3 per 1,000 in 1995. Meanwhile, the average for a high-cost claim remained stable at around $100,000.

Mr. Brence calculates that the reduction in high-cost cases saved Merrill $6.5 million in direct medical costs over the five-year period-not to mention the reduction in suffering and time lost for employees. After seeing Merrill's experience, other companies have signed up for the Active Health/Empire system, including Marriott International Inc., Sears, Roebuck & Co. and Circuit City Stores Inc.

The plan puts 'dollars in the right place,' says Gary Krueger, manager of group benefits for Circuit City, 'as opposed to buying something that's just managing access to care.'

The quality-monitoring system also caught the federal government's interest. This summer, the government will begin a pilot project, to last at least a year, using the system for 40,000 federal employees in New York and an undetermined number of other workers elsewhere in the country."



3. Upstart lands Merrill Lynch in court

MyCFO gets restraining order after executive exodus
San Francisco Business Times - November 30, 2001by Ron Leuty
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Tiny myCFO Inc. has taken financial powerhouse Merrill Lynch to court, saying it wants to stop five employees who have joined the brokerage giant's wealth advisory business from soliciting old clients, using pirated software and sharing trade secrets.

MyCFO was granted a temporary restraining order Nov. 21 by San Francisco Superior Court Judge David Garcia to prevent five former employees -- including its managing director of investment advisory service -- from sharing proprietary secrets with their new employer, Merrill Lynch's San Francisco office.

The court has scheduled a preliminary injunction hearing for Dec. 20, but the companies have held discussions toward a settlement, said attorney John Eichhorst, who represents myCFO. A settlement could come in days, a source said.

"We're interested in reaching a resolution on any issue," said Merrill Lynch spokesman Bill Halldin.

The case offers insight into the dog-eat-dog competition for managing the financial affairs of multi-millionaires -- a business that has taken off locally with the Bay Area's explosion in tech-related wealth.

MyCFO, a 2-year-old, Mountain View-based wealth advisory firm established by Netscape Communications founder Jim Clark, deals with some 350 high net-worth individuals with an average of more than $90 million under advisement with the firm; Merrill Lynch's private wealth advisory centers are a new initiative within the company, designed to help customers with more than $10 million. Other banks and brokers have similar units.

"We're not without competition," said Scott Ralston, the San Francisco-based managing director of Merrill Lynch for Northern California and the Pacific islands.

Clients, trade secrets and more
Richard Hogan, formerly managing director of myCFO's investment advisory services group, along with Chris Berry, a director in the same group, and Bill Woodson, tax director in the income tax planning and compliance services group, joined Merrill Lynch on Nov. 6. They were joined by Andrea Bornstein, a senior product manager, and analyst Daniel Plotinsky.

At Merrill Lynch, the team is supposed to advise ultra-rich clients on tax planning and investments. But in anticipation of the temporary restraining order, Merrill Lynch tabled the work of the five, Ralston said.

MyCFO claims in its request for an injunction, which was filed Nov. 20 and names its five former employees and Merrill Lynch, that Hogan and Berry in June began conspiring to misappropriate myCFO's proprietary and confidential client information and trade secrets.

Hogan and Berry declined to comment for this story; Berry referred questions to attorney Kevin Holl, of Gordon-Creed, Kelley, Holl & Sugerman LLP in San Francisco, who represents the five individuals. Holl was not available to comment Nov. 28.

Hogan and Berry "anticipated that they would receive substantial additional compensation" from Merrill Lynch if they succeeded in "stealing" trade secrets and clients from myCFO and transferring them to Merrill Lynch, according to myCFO's court filing.

"The materials are trade secrets and are entitled to protection from misappropriation," said myCFO attorney Eichhorst, of Howard, Rice, Nemerovski, Canady, Falk & Rabkin in San Francisco. "Discovery is just beginning, but that's what appears to have happened here."

MyCFO claimed in the court filing that Hogan maintained "substantially complete" lists of myCFO clients and transferred large myCFO computer files to a personal email account.

Hogan and Berry announced in June, according to myCFO's court filing, that they were resigning to accept offers from Merrill Lynch and they had "recruited some of myCFO's best junior talent."

But myCFO CEO Art Shaw met with Hogan and Berry, and the company boosted compensation to those employees, according to the court filing. Hogan, Berry and three junior employees opted to remain with the company.

Headed for settlement?
But the two continued to plot their departure from myCFO, the company claims in the court filing, and encouraged Woodson, Plotinsky and Bornstein to join them. That would cause a wholesale transfer of a portion of myCFO's service business, according to the court filing, without compensating myCFO.

In mid-October, myCFO claims, Plotinsky copied various software that had been customized by myCFO. According to the court filing, that included "Workbench," a first-generation program to organize and track all of myCFO's client financial information, and second-generation software that "is so new that it is still in the prototype stage."

Hogan, Berry, Woodson, Plotinsky and Bornstein announced their resignations Nov. 6 in "virtually identical" one-sentence letters to myCFO.

"We believe each of these individuals has acted appropriately," said Merrill Lynch spokesman Halldin.

The dispute is not one for the National Association of Securities Dealers, which arbitrates such disputes between brokers, because the five workers' employment agreements don't require that, Halldin said. But the employees are subject to arbitration through the American Arbitration Association, he said.

A settlement also may be near, a source said.

Merrill Lynch, according to Garcia's temporary restraining order, is allowed to announce that new employees have joined it from another firm with a single announcement to each client at the old firm. However, Eichhorst said, "Solicitation is over the line."

Building Merrill
Merrill Lynch officials contend the case isn't a David-and-Goliath story but simply a normal move of people from one company to another -- a key component to building its private wealth advisory business.

Over the past seven months in San Francisco, Merrill Lynch has built its 70-employee private wealth advisory center -- a priority service for the firm nationwide -- through internal training and by hiring teams of financial advisers from Goldman Sachs, J.P. Morgan H&Q and Deutsche Banc Alex. Brown as well as myCFO, Ralston said.

Those adviser teams manage 150 to 200 clients with assets of $10 million to $1 billion, Ralston said. And, he said, clients typically follow advisers when they move to other firms.

The myCFO crew had contacted Merrill Lynch officials before Ralston arrived in the Bay Area in the spring, he said.

"We're proud the myCFO crew is here," Ralston said. "We're really stoked up about the future of Merrill in the Bay Area."

Merrill Lynch has long offered a variety of services to wealthy clients, but only recently broke it out as a separate business to focus on it more heavily, Ralston said. Merrill Lynch now has 40 teams of about eight people each in private wealth management offices in San Francisco, Los Angeles, Boston and Chicago.

The San Francisco office, which will move to 101 California St. from its current digs at 600 California St., will grow to 125 to 150 employees by the end of 2002.

"I've never seen anything quite like this," Ralston said. "We're not going out to get them. They're coming to us because of a new awareness of (our) platform."



4. ML HR Practices Wins Payroll Award

Published: September 2003

Merrill Lynch recently was honored by the American Payroll Association's (APA) Large Employer Task Force with the 2003 Prism Overall Best Practices Award. The annual Prism awards recognize payroll departments for their exemplary payroll management processes, technology and overall business practices.

"Our best-practice approach to payroll has helped lead the way in building employee and manager acceptance of self service applications," commented SVP Terry Kassel, head of Human Resources. "In the U.S., we have effectively automated a wide variety of systems — from timesheets to paystubs to managers' payslip reports — resulting both in substantial cost savings and employee satisfaction."

What It Takes to Be a Winner
In choosing the recipient of the Overall Best Practice Award, the APA evaluates candidates based on a variety of criteria, including:

5. Use of best practices;
Cost saving strategies;
Sharing cutting-edge business practices with peers; and
Applying best practices to reduce cost per check.
How It All Began
After seeing MCI's self-service suite of tools at the inaugural Payroll Best Practices conference in 1996, Director Frank Orawiec, head of Global Payroll, worked with his team to develop a strategy for migrating to a paperless payroll environment, aimed at reducing expenses and maximizing efficiency, while providing the best possible service to employees. At the awards ceremony held in Miami, Florida, Orawiec told the audience "Merrill Lynch used this as our opportunity to find out if we had it, if we could cut it, and to validate where we ranked among our fellow payroll organizations. Anyone who wants to be a leader and who relishes a challenge, must have a benchmark to measure up against."

ML Goes Paperless
Beginning in 1997, ML introduced a number of self-service online applications including Payroll Self Service, Paycheck Direct and Timesheet Direct. Among other things, these applications allow employees to have their paychecks directly deposited into up to four accounts, make W-4 elections, elect tax-withholding rates from supplemental payments, view and print their paystub and record work hours (for non-exempt employees). Later, with the implementation of Paylist Direct, managers gained the ability to review their employees' pay for accuracy and run historical queries on prior payments.

Moving to a paperless environment has generated annual pre-tax savings of over $750,000, with over 50% of that savings coming from reduced printing and distribution costs associated with using Timesheet Direct. Additionally, timesheet-related call center traffic was reduced from 16% to just 2%, a reduction of 220 calls per week. "My team worked long and hard to achieve this award but we also had some fun along the way," Orawiec said. "The end result is the ability to say that in 2003 we are the APA's best practices company!"



5. Merrill Lynch's HR execs built their own call center, and cut overhead by fully 50 percent, without sacrificing service.

March 2004

In early 2002, with demands for deep budget cuts from top brass getting louder, Merrill's human resources executives made the radical decision to slash HR costs not by taking the outsourcing route—a predictable strategy that might have reduced expenses by perhaps 20 percent—but by building from scratch an HR call center of its own to provide quick answers to personnel concerns and handle routine administrative chores, such as processing new hires.

"Especially after Sept. 11, our priority was to make sure our employees remained well served," says Terry Kassel, Merrill's senior vice president and head of human resources. "Budgets were under pressure, but we felt we shouldn't do something that might help us in the short term but hurt us in the long term through employee dissatisfaction and the inability to retain future leaders."

[During the same period, Merrill took a number of steps to turn its fortunes around, laying off 4,500 employees and cutting advertising, sales, travel, entertainment and marketing budgets by 15 percent or more. But one of its least known efforts (HR effort) also has been among the most successful]


Merrill admits to big losses at hearing

01 October, 2004

— Villalba: claiming unfair dismissal
Employment tribunal hears the bank’s European private client division suffered losses of $47m in 2002, and how its Spanish operation became a cause for concern

Leading wealth management organisation Merrill Lynch has admitted to substantial Euro­pean losses, employing inexperien­ced regional management and particular problems in running its Spanish private client operation, as part of its defence presented to an unfair dismissal hearing in London.
Merrill Lynch is currently facing a £7.5m (E11m) claim from former vice- president Stephanie Villalba, for unfair dismissal, sexual discrimin­ation and unequal pay. Ms Villalba was market executive responsible for Merrill’s European private client operation.

During a hearing at London’s employment tribunal in Croydon, Raymundo Yu, head of Merrill’s non-US Global Private Client business, said that in 2002, the European division reported

a pre-tax loss of $47m.

“It was losing almost $1m a week. Although 2002 was an extremely difficult year for Merrill Lynch’s entire business, Europe’s pre-tax loss stood up as being a regional loss leader,” Mr Yu said in his statement. He added that even though he didn’t expect Europe to make a profit, he didn’t expect it to make such a massive loss “which was completely out of sync with all the other regions.”

However Ms Villalba claims that judging her performance and her region’s, taking into account pre-tax results was unfair, since they were unrepresentative and inaccurate because they included significant expenses charged to the European region that were incurred by other business units.

“This is the way in which all businesses within Merrill Lynch operate and was the approach adopted across the regions,” Mr Yu said in his statement to the tribunal. Replying to comments from Ms Vill­alba describing her performance as “extraordinary”, Mr Yu said Eur­ope’s performance during that peri­od “was only extraordinary in the sense that it was extraordinarily bad”.

Regarding the bank’s Spanish private client operation, then headed by Manuel San Salvador, Mr Yu described Mr San Salvador as a “relatively inexperienced office manager.” In 2001 the Spanish tax authorities initiated an inspection of Merrill Lynch’s business activities in Spain. “The Merrill Lynch structure was perceived by the tax authorities as being ‘opaque’ and therefore became a source of concern for them,” Mr Yu said.

“I was particularly disappointed that Stephanie was not leading us out of the major problems that we were experien­cing in our Spanish offices,” he add­ed. He said Ms Vill­alba failed to travel to the country often enough, which he found frus­trating, showing “a lack of owner­ship, focus and leadership by her”.

Mr Yu continued: “The issues being experienced in Spain were exactly the sort that demanded strong leadership from the most senior manager in the region. From the perspective of the FAs [financial advisers], they would have known that Manuel San Salvador was not the real decision-maker behind the corporate strategy decisions that were being made in Spain. They would want to hear from a representative from senior management. Stephanie.”

Ms Villalba was dismissed in July 2003 after 17 years working for Merrill Lynch. She claims her dismissal was unfair, describing Merrill Lynch as “institutionally sexist”. The bank has denied these allegations, highlighting the fact that Ms Villalba was replaced by another woman, Kimberly Palmer. The hearing continues.


6. UK tribunal dismisses suit against Merrill Lynch

Friday, Dec 24, 2004, Page 12

A British panel on Wednesday dismissed a high-profile sexual discrimination suit filed by a former executive against Merrill Lynch, but ruled that the woman who made the accusations had been poorly treated and unfairly dismissed.

Stephanie Villalba, a former top executive in Merrill's European private client business, was not the victim of gender discrimination or unequal pay, as she had claimed, an employment tribunal found. Her demand for ?7.5 million (US$14.4 million) in compensation, the largest sexual discrimination claim ever made in Britain, was denied.

The tribunal found, though, that Villalba, a 17-year employee of the firm, had been "shabbily and unfairly treated," "sidelined" and "belittled by colleagues" -- though not because of her gender.

The three members of the tribunal said they were disappointed with the conduct of Merrill Lynch's human resources department.

Under British law, Villalba could be entitled to as much as ?55,000 (US$106,000) for being dismissed unfairly, but no award has yet been determined by the court.

The 80-page ruling also described Merrill Lynch's bonus allocation system as "haphazard," and noted that executives were often compensated based on rumor and "anecdotal impressions of senior managers" that had little to do with an employee's actual performance.

A Merrill Lynch spokesman, Michael O'Looney, called the decision a "major victory."

"We said from the start that this case was about performance, not gender," he said in a statement. "Ms. Villalba was removed by the very same person who had promoted her into the position and who then replaced her with another woman."

Mark King, a lawyer for the firm of Lewis Silkin who represented Villalba, said that his client was "disappointed and distressed" by the decision. The parties were not present in court for the ruling, which was released on Wednesday.

The decision followed detailed testimony from both sides this summer and fell to a three-member employment tribunal in the southern suburbs of London.

In Villalba's complaint, she said that Merrill Lynch had promoted her to a new position of increased responsibility, then undermined her authority because she was a woman. She also said that Merrill Lynch was arbitrarily allocating some profit and loss figures to different parts of its business, and that the bank had paid her much less salary and benefits than some of her underlings, without any explanation.

Merrill Lynch countered by calling nearly two dozen other employees as witnesses, including Villalba's former boss, Raymundo Yu Jr, who said that she did not have the skills necessary to do her new job.

In its decision, the panel wrote that "a man [whether hypothetical or actual] at roughly Villalba's level, about whom there had been similar performance concerns, would not have been treated more favorable." But, the ruling said, Villalba, 42, was "isolated and disrespected" behind her back, particularly by the company's human resources department. E-mail messages between human resources personnel and some of Villalba's closest colleagues "border on the vindictive," it said.



7. Merrill's Kim Joins Exodus of Traders to Hedge Funds (Update1)

May 16 2007

Dow Kim, the second-highest-paid executive at Merrill Lynch & Co., is resigning to form a hedge fund, the latest top manager to leave an investment bank for the higher pay of running an independent trading firm.

Kim, 44, is stepping down after 13 years at New York-based Merrill Lynch, the third-biggest U.S. securities firm. A former currency derivatives trader, he has led Merrill's sales and trading unit since 2003, a period when trading revenue more than doubled.

While Kim's $37 million pay package last year was second at Merrill only to Chief Executive Officer Stanley O'Neal's, hedge- fund managers can earn as much as $1 billion, according to Institutional Investor's Alpha magazine. Goldman Sachs Group Inc. has lost partners including Hyder Ahmad and Eric Mindich to new hedge funds in the past three years. Bank of America Corp. said earlier this month Chief Investment Officer Ian Banwell would leave to open a fund.

``Dow can make 10 times what he's making now if he goes out on his own,'' said Gary Goldstein, Chairman and CEO of Whitney Group, an executive-recruitment firm in New York. ``This is probably a good time to do it.''

Gregory Fleming, 44, who was co-head of trading and investment banking with Kim, will become co-president of Merrill with Ahmass Fakahany, 48, who was chief administrative officer. Kim's departure makes Merrill the only major U.S. securities firm without a trading veteran in its highest ranks at a time when that business provides almost half of Merrill's revenue.


8. EEOC Sues Merrill Lynch
June 2007
EEOC Claims Merrill Lynch Discriminated Against Iranian

The Equal Employment Opportunity Commission sued Merrill Lynch & Co. on Tuesday over its treatment of an Iranian Muslim employee.
The worker, Majid Borumand, claims he was denied promotions and ultimately fired because of his ethnicity and faith.

Merrill Lynch spokesman Mark Herr said the company is innocent.

"We regret the EEOC believes there are grounds for its filing," he said. "We respectfully, but strongly, disagree with the EEOC and deny all of Mr. Borumand's allegations."

The EEOC said Borumand was hired in 2002 under an immigration program that allows U.S. firms to recruit talented foreigners; Borumand has a doctorate in theoretical physics and a masters in mathematical finance.

While employed at the company, Borumand was subjected to "remarks that reflected animus toward his national origin and religion," the EEOC said in a complaint filed in U.S. District Court in Manhattan.

The EEOC said that on one occasion, Borumand was told that "the reason you are not allowed on the trading floor is because you are from a country which has a high risk factor and a threat."

The federal agency identified Borumand as an analyst in Merrill Lynch's global markets and investment banking model development group, but the company disputed that description, and said he was a senior programmer in a global equity technology group.He has a doctorate in theoretical physics and a masters in mathematical finance.


9. Flexibility in HR

Many companies are saddled with human-resources policies that are so specific that they are no longer relevant. They then become bureaucratic barriers to effective management and undermine performance. Increasingly, companies are creating more general human-resources policies that give workers greater discretion, within clearly defined limits, to apply the policies in ways that suit their unique needs.

"Broad-band compensation," used by Merrill Lynch & Co. and Nike Inc., among others, is a common example of such an approach. In this plan, companies use fewer, wider salary ranges rather than many specific job classifications and pay grades. This gives managers more latitude to compensate top performers, for instance, or to offer more money to land a star. Similarly, car-rental company Avis Budget Group Inc. allows department managers to control their budgets within pre-set limits. If managers want to reward one employee with a big chunk of that money, they are free to do so.


DSP Merrill Lynch - India

10.Mission Statement - Human Resources

To see an individual and an internal customer in every employee
To strive towards the total well being of this internal customer both on the professional and personal front
To uphold the values that DSP Merrill Lynch stands for

http://www.dspml.com/dspwrld-career.html accessed on 11/9/07


Merrill Lynch found a 15 percent reduction in turnover when telecommuting was implemented, while Illinois Bell experienced a 40 percent increase in productivity from telecommuting.

http://www.uky.edu/HR/WorkLife/flexibility.html accessed on 11/9/07


The financial services industry has consolidated and transformed itself significantly due to deregulation, technology, and globalization. In a business that is understandably very action-oriented, transactional, regional and tactical, the CEO, David Komansky, understood the strong need to deepen the skill set of Merrill's top leaders to become more strategic, more enterprise minded, more receptive to change and ultimately more global in all respects. His goal was to build a stronger enterprise in the face of increasingly more complex business conditions. Moreover, competition from traditional and non-traditional sources challenged the company to be even more effective at the intangibles such as client relationship management, employee retention, strategic clarity, and motivational leadership.



CEO David Komansky, along with the Executive Vice President of Human Resources, engaged CED to help build and deliver a systematic, multi-faceted approach for leadership development. The target audience was initially the top 50 executives and then was extended to the next 500 managers reporting to them. Merrill Lynch had the following goals for the program:

build leadership know-how and mindset
create a strong sense of teamwork across the enterprise
anticipate and address leading edge issues facing all the leaders of the company
To these ends, CED developed and supported the following initiatives:

Executive Forum Series: Two-day off-sites held several times per year, for the top 50 executives, focusing on key strategic and leadership challenges facing the firm, such as technology, war for talent, globalization, and branding. CED designed and facilitated these off-sites which include expert presentations, extensive dialogue and debate, and follow-on action steps.

Leadership Development Forums: Two-day off-sites offered multiple times per year for heterogeneous groups of 40-50 managers from the population of the next 500 managers. These included similar topics as above. They were also designed to inform managers of the best practice initiatives from across the company, external best practice education, and structured strategic dialogues with senior executives.

Executive Coaching: CED provides one-on-one coaching for individual executives to deepen their leadership skills and strengths.

Business Unit Off-sites: As strategic messages from the enterprise level were operationalized in business units, Merrill Lynch leaders engaged CED to support off-sites designed to address the front line challenges of the enterprise strategy. CED's role was to plan, design, and deliver off-sites that were highly interactive, engaging, and conducive to both problem solving and team building.



There are a number of ways that Merrill Lynch values the impact of the Forum Series. Leaders acknowledge a more seamless senior team, a team that is more global in perspective as they developed their global platform in recent years, especially in Europe. Moreover, a new generation of leaders have been identified and promoted into positions of greater responsibilities. Finally, a variety of difficult competitive challenges have been more thoroughly discussed and addressed through these efforts leading to actions and decisions that have helped Merrill Lynch retain and strengthen its premiere positioning.

http://cedinc.com/client/index_client.htm?http://www.cedinc.com/client/solutions/body_merrill.htm ACCESSED ON 11/9/2007

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