Merrill Lynch's New Herdsman

Merrill Lynch had an unexpected shake-up at the very top last week. Chairman Roger E. Birk, 54, the company boss since 1981, announced he would step down July 1 as chief executive officer to make way for the firm's president, William A. Schreyer, 56. The move reflected troubles in the Merrill Lynch herd. Only about a year ago, the Merrill Lynch bull was snorting with satisfaction. Propelled by a booming stock market, company profits for the first half of 1983 jumped to $239 million, 3 1/2 times as high as in the same period in 1982. But since then the bull has been hit by lances from all sides. In the fourth quarter of 1983, Merrill Lynch poured out $42 million in red ink.

Schreyer, who is known for being decisive, will need to be. The company has been rocked by bad ventures. Last year Merrill Lynch spent $88 million to satisfy customers to whom it had sold annuities issued by Baldwin-United, which later went bankrupt. A career-long employee whose father was a Merrill Lynch broker in Williamsport, Pa., Schreyer recently led an extensive study of the company's problems. Dubbed SWAT, for Schreyer Working Team, the group found the firm had tried to serve too many different types of customers.