NEW YORK — Merrill Lynch & Co. has lost billions of dollars in the subprime mortgage crisis, but the company's deposed chief executive is walking away with more than $160 million.

Capping a boardroom drama that began last week, Stan O'Neal stepped down as Merrill's chairman and chief executive yesterday, becoming the first head of a major investment bank to be ousted because of mortgage-related losses.

O'Neal's departure follows Merrill's disclosure last week of a $7.9 billion mortgage-induced write-down, the largest such hit taken by any Wall Street company and $3.4 billion more than Merrill had predicted less than three weeks earlier.

Some experts criticized the payout as excessive.

"I wish my performance was so bad that I could get $160 million to leave," said Bill Coleman, senior vice president of compensation at www.Salary.com, a Waltham, Mass.-based consulting company.

But others noted with approval that O'Neal received no severance payment or annual bonus for 2007. However, he is leaving with $161.5 million in stock, options and other retirement benefits, according to a company filing with the Securities and Exchange Commission.

The bulk of the package is in so-called restricted stock, which could appreciate significantly in coming years if Merrill's share price under O'Neal's successor rebounds from its steep drop this year.

Under his agreement with Merrill, O'Neal, 56, will gain full rights to the shares on the same schedule that would have applied if he were still working at Merrill. The restricted stock is being treated that way because the company is characterizing O'Neal's departure as a retirement.

In addition to the restricted shares, O'Neal's package includes stock options, accrued pension benefits and deferred compensation. The company also agreed to provide him with an office and an executive assistant for up to three years.

"He's walking away with the generous compensation that he's mostly already earned," said Ed Durkin, director of corporate affairs for the United Brotherhood of Carpenters, whose affiliated union pension funds own 875,000 Merrill shares. "At least they didn't give him more. Although, given what's transpired, it would be a stretch to justify anything else."

Merrill should have pressed O'Neal to give up some of the $26.8 million in restricted stock that he was granted last year when subprime problems were brewing, said Brian Foley, an executive compensation expert in White Plains, N.Y.

"They didn't add, but they didn't subtract, and the question is whether they should have subtracted something from 2006," Foley said.

A Merrill spokeswoman would not comment yesterday.

Holding on to restricted stock can be quite lucrative, said James Reda, founder of James F. Reda & Associates, a New York-based compensation consulting company.

Michael Eisner made more than $100 million in restricted-stock gains when shares of the Walt Disney Co. rose after his departure as chief executive in 2005, Reda said.

"If the new guy comes in and tightens things up and turns things around and the stock price goes up $20, Stan O'Neal benefits from that," Reda said.

O'Neal's 21-year career at the brokerage giant ended with a six-paragraph news release announcing that board member Alberto Cribiore would become interim chairman until a permanent successor could be found. Merrill's co-presidents, Greg Fleming and Ahmass Fakahany, will handle day-to-day management.