In a sweeping reorganization of its top management, Bank of Boston Corp. on Friday promoted two of its five executive vice presidents to vice chairman and dismissed three others.

The executives elevated - both of whom joined Bank of Boston within the past 14 months - are New England group executive Edward A. O'Neal, 49, and chief financial officer William J. Shea, 45.

The pair will join chairman and chief executive Ira Stepanian and president Charles K. Gifford in the newly created office of the chairman.

Leaving the bank are Kevin J. Mulvaney, a 21-year veteran who was in charge of national corporate lending; Newton P.S. Merrill, the global banking chief, and Michael Simmons, the technology and operations head.

The bank's stock was up 75 cents to $23.50 at the close of trading on Friday.

A Strong Signal

Bank of Boston officials said the restructuring is designed to eliminate layers of management, enabling it to better serve its customers. It is modeled after recent "reengineerings" carried out at General Electric Co. and other high-tech firms, they said.

Through the reorganization, Bank of Boston is also sending a strong signal about where it believes its future lies. New England's second largest banking company has long been known as a blue-chip corporate and international bank.

But by promoting Mr. O'Neal - a 23-year veteran of Chemical Bank's consumer operation - and dismissing Mr. Mulvaney and Mr. Merrill, Bank of Boston is demonstrating its newfound hunger for retail business.

|A Prominent Role'

"The New England piece of the business has taken on a prominent role in the bank's future," said Gerard Cassidy, an analyst at Hancock Institutional Equity Services in Portland, Maine. "It's the area in which they have the most work to do."

At the same time, Mr. Shea's elevation signals Bank of Boston's continuing zeal to control costs. A former vice-chairman of Coopers & Lybrand, Mr. Shea joined the bank in December to help bring its ratio of expenses to revenues down to a slim 60%.

"Bill was brought on board to address expense control issues," said Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods Inc. in New York.

Dismissals Surprising

The reorginization does away with Bank of Boston's five major business groups, which had each been run by an executive vice president. In their place will be 15 core businesses and 10 companywide support areas, each reporting to the new office of the chairman.

The dismissals of Mr. Mulvaney, Mr. Merrill, and Mr. Simmons suprised Bank of Boston watchers. Mr. Mulvaney, 45, had been widely credited with building the bank's 100-office, 25-country global operation.

In December, he exchanged assignments with Mr. Merrill, swapping his international responsibilities for the national banking group, where he was also highly regarded.

But Mr. Mulvaney's relationship with Mr. Stepanian had long been rocky, one source said. The rift began when Mr. Mulvaney's name was circulated as a possible replacement for Mr. Stepanian as Bank of Boston was on the brink of insolvency.

"[Mulvaney] was very good to his people, but he did not play up to the internal egos," the source said.

Mr. Merrill and Mr. Simmons were both heralded as great catches when they joined Bank of Boston in 1991 and 1990, respectively. A 30-year veteran of Bank of New York, Mr. Merrill is regarded as an experienced bank merger strategist. Mr. Simmons made his mark as chief technologist at Bank of America and at Fidelity Investments.

Bank of Boston lost two other senior executives recently. Robert M. Mahoney, head of New England corporate banking, left to join Citizens Financial group, Providence, last month. And Charles H. Cremens, who managed Bank of Boston's portfolio of other real estate owned, moved to the Travelers Corp.

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