Run by Merrill veteran Robert McCann, a onetime trader who clashed with O'Neal and left for a spell in 2003, the retail group has a 26% pretax margin and earns a healthy 30%-plus return on equity.
Thain also leapfrogged over insiders who had been considered candidates, including Greg Fleming, an investment banker who is Merrill's co-president, and Robert McCann, the head of its brokerage division.