The announcement came from McCann’s lawyer, Steven G. Eckhaus, a partner at New York-based law firm, Katten Muchin Rosenman. McCann “can return to the financial services industry at the end of this month,” Eckhaus said in an interview. He wouldn’t discuss any monetary figures of the settlement or which company McCann might be considering.
McCann, the former head of wealth management at Merrill Lynch, had sued Bank of America in state supreme court in Manhattan, demanding to be released from a non-compete clause. The lawsuit was filed amid persistent media rumors that McCann, 51, was planning to head up the wealth management unit at UBS. The non-compete clause prevented him from taking that job or any other similar job for a specified period of time. UBS declined to comment.
In his lawsuit filed in New York State Supreme Court in August, McCann contended that his role at his former firm was “downgraded dramatically” after Bank of America took over the flailing company last September. He also unleashed a litany of complaints in the suit about his diminished role at Merrill, where he was an executive vice president and vice-chairman of Merrill Lynch, overseeing the highly profitable global wealth management unit.
McCann, in his Jan. 5, 2009 resignation letter to then-Merrill Lynch President John Thain, McCann wrote: “John, my position has essentially been downgraded dramatically. While I understand that changes in personnel and reporting relationships often accompany a merger, such a drastic diminution changes the nature of the job.”
Prior to the merger, McCann was responsible for the two arms of the global wealth management unit— global private client and global investment management. Following the merger, the investment management business reported to Bank of America’s Keith Banks. In addition, Banks took responsibility for the institutional portion of the firm’s retirement business, which had previously overseen by McCann.
McCann also previously oversaw First Republic Bank, which was acquired by Merrill in January 2007. First Republic eventually was brought under the Bank of America umbrella and no longer reported to McCann.
As a result of the changes to his job, McCann wrote that he wanted his termination to be treated as being for “good reason following a change of control.” Under Merrill’s long-term incentive compensation plan, McCann was given the right to terminate his contract for “good reason” and not lose his equity benefits if there was a meaningful and detrimental change to his responsibilities following a change of control of the company, or if there was a significant drop in his cash bonus. McCann said he received no cash bonus in 2008. For the three years previous he had received a cash bonus of $5.23 million.
Bank of America bought Merrill last year in a controversial multi-billion-dollar deal for which BofA chief executive officer Kenneth Lewis has been harshly criticized. Lewis announced his retirement as CEO of BofA yesterday. He will step down at the end of the year.