Sunday, November 22, 2009

Titanic Can't Find Willing Skipper

On the wire today:

Nov. 22 (Bloomberg) -- Bank of America Corp.’s board may extend its search for a new, permanent chief executive officer into 2010 if directors can’t settle on a candidate in the next four days, according to people familiar with the matter.

Some candidates are reluctant to wade into disagreement between board members and the government over the bank’s future strategy, said Rochdale Securities LLC analyst Richard Bove, citing large shareholders briefed on the matter.

“The government and perhaps some of the new directors want the bank cut back in size, while the old core Bank of America people don’t want to do that,” Bove said.

Dropping Out

O’Neill, a former chief financial officer of predecessor BankAmerica Corp., withdrew from consideration after talking with search-committee members because he felt they didn’t fully grasp how serious regulators are in their demands for change, the people said.

O’Neill told the committee members that the company needed to increase the size of its banking operations and shrink its trading business, one person briefed on the talks said. The committee members responded that such a shift would be unproductive because it would abandon the strategy set when Lewis bought Merrill Lynch & Co., the person said.

Compensation is another obstacle, because Bank of America’s $45 billion bailout puts the CEO under the purview of paymaster Kenneth Feinberg. Lewis agreed in October to forgo any pay for 2009 after being advised to do so by Feinberg.

At least four of those on the Finger list subsequently said they weren’t interested. They are O’Neill; former JPMorgan Chase & Co. investment-banking co-head William Winters; U.S. Bancorp CEO Richard Davis; and Eugene McQuade, a former Freddie Mac president who now oversees Citigroup’s largest banking subsidiary, according to people familiar with the matter.

Two executives not on the list, Bank of New York Mellon CEO Robert Kelly and BlackRock Inc. CEO Laurence Fink, have told colleagues and friends they’re not interested.

Aside from Moynihan, 50, other internal candidates include Chief Risk Officer Gregory Curl, 61. Lewis, 62, favors Curl, one person familiar with the matter said earlier this month.

Outside Candidates

Federal Reserve officials, who questioned Lewis’s judgment when he considered backing out of the bank’s $29 billion purchase of Merrill Lynch, are pressing for an outsider because they want more drastic change, a different person said.

Lewis has indicated to associates that he would remain as CEO on an interim basis if asked by the board, according to a person familiar with his thinking. Rochdale’s Bove wrote in a Nov. 20 note that several large investors support the idea.


I find it hard to believe that NO ONE wants to eat the $hitpile that Ken Lewis has prepared.

It's unbelievable that Greg Curl's name is in the mix. He's nominally the *chief risk officer* for Bankrupt of America. But more than that, he was supposedly the *brains* behind all of BoA's mergers. How'd they work out again? Furthermore, topping out his the article states - LEWIS FAVORS HIM!

I say go with Moynihan. I met the guy socially several years ago. He had the perfectly firm handshake!

ANYONE but extending Ken Lewis.

Although admittedly, Lewis hanging on because no one wants to inherit his job would have plenty of deeply ironic, entertainment value. A captain, by all rights, should go down with the ship, no?


Funny Circus Bears said...

Anyone who can jack my 50,000 shares, bought at an average price of $5.20, to 30 has my full support.

CaptiousNut said...

Nice buy!

Dude, you better sell them.

That stock will see $5 again.