Stan O’Neal, the chief executive of Merrill Lynch, will walk away with more than $200 million (£97 million) in company holdings and retirement benefits just days after the Wall Street firm announced the biggest quarterly loss in its 93-year history.

Mr O’Neal, who may be given an additional severance package at the discretion of Merrill’s compensation committee, has $90 million worth of the company’s shares and about $115 million of stock options and so-called restricted stock, according to regulatory filings.

Merrill Lynch was last night racing to appoint a successor as the firm sought to draw a line under recent woes and claw back its credibility.

Mr O’Neal last week admitted responsibility for an $8.4 billion writedown that gave Merrill Lynch a third-quarter loss of $2.24 billion. The firm has made no attempt to rebut widespread predictions of Mr O’Neal’s departure, now viewed as inevitable, but it is unlikely to make an announcement before a successor is found.

The board is understood to be working frantically to decide on whether to appoint a temporary or a permanent successor, and whether to hire externally or from within. The board must also decide whether to split the roles of chairman and chief executive, both held by Mr O’Neal.

Brad Hintz, an analyst at Sanford C. Bernstein, said: “I have been impressed with Merrill’s corporate governance. Stan O’Neal admitted responsibility and didn’t try to hang it on someone else and you don’t see that very often. They are right to wait until they have found a successor before they announce Stan’s departure, because having nobody to take his place would add even more uncertainty, particularly among the staff.”

The front-runners to take over the bank on a permanent basis include Laurence Fink, head of the BlackRock investment manager in which Merrill owns a 49 per cent stake. Gregory Fleming, Merrill’s co-president, and Bob McCann, head of its brokerage arm, are also seen as key candidates.

Outside the firm, John Thain, chief executive of NYSE Euronext, is tipped as the most likely appointment.

Merrill Lynch declined to comment on Mr O’Neal’s departure or his successor. Mr O’Neal’s expected departure comes after writedowns covering sub-prime mortgage bonds that gave Merrill Lynch the biggest quarterly loss in its history.

In addition to his various stock holdings and possible severance package, Mr O’Neal has accrued pension benefits over his 20 years at the firm estimated to be worth between $20 million and $28 million.

Armando M Codina is likely to end up as the kingmaker. Mr Codina, a Cuban billionaire with close ties to President Bush, is head of the board’s four-person nominating and corporate governance committee that is scrutinising potential candidates.

Mr O’Neal’s departure would contrast with the case of Charles Prince, the chairman and chief executive of Citigroup, the struggling bank, who has managed to stave off his resignation by firing some of his senior lieutenants. Like Merrill Lynch, Citigroup has recently announced multi-billion dollar writedowns connected to the credit crunch.

Two weeks ago, Mr Prince executed a radical shake-up of the bank’s top management. However, the changes have not entirely halted calls for Mr Prince’s resignation.

Shares in Merrill Lynch closed up just 1.33 cents at $67.42 as investors awaited further news on Mr O’Neal’s departure.

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