CEO Lewis, at the center of the controversy over the ill-fated acquisition of Merrill Lynch, will depart at the end of the year
Bank of America (BAC) CEO Ken Lewis, whose tenure as the head of the Charlotte (N.C.)-based banking giant has been on shaky ground since the bank's troubled purchase of Merrill Lynch a year ago, will retire at the end of the year. No immediate successor has been named, the bank said in a statement issued late in the afternoon on Sept. 30.
No reason was given for Lewis' decision to retire, although the executive had signaled his willingness to step down once BofA had repaid its government loans and fully integrated its acquisitions of Merrill and mortgage giant Countrywide—none of which the bank has done yet.
Lewis, 62, has been under intense pressure since April, when shareholders voted to strip him of his role as chairman. Lewis' public chastisement arose in large part from the controversy over whether Lewis was completely up-front with shareholders about Merrill's financial condition and a controversial agreement to pay $5.8 billion in compensation and bonuses to Merrill executives just before the deal closed.
Attention immediately turned to a possible successor to Lewis, with the immediate front-runner becoming Brian Moynihan, a former Fleet Financial executive whose recent rotation through several key jobs suggested he was being prepared to succeed Lewis.
Trouble with the Feds
Lewis has also been on the outs with federal regulators, who had insisted on changes including a board overhaul, revamped risk management and lending practices, and the development of a clear succession plan. In August, the Securities & Exchange Commission filed charges over the bank's disclosures to shareholders over the Merrill deal, then immediately announced a settlement and $33 million penalty. On Sept. 14, a federal judge rejected the settlement as inadequate to protect the interests of shareholders, and ordered a trial.
Lewis, who reveled in Bank of America's growth into a financial powerhouse, orchestrated a number of high-profile acquisitions during his tenure, hauling in regional giants such as FleetBoston and LaSalle Bank as well as credit-card operator MBNA in recent years. Lewis also engineered the bank's 2008 purchase of mortgage lender Countrywide Financial as the subprime mortgage market was in the midst of collapse.
Lewis joined North Carolina National Bank—the predecessor to the current Bank of America—as a credit analyst in 1969 and has been CEO since 2001.
In a statement released by the bank, Lewis said: "The Merrill Lynch and Countrywide integrations are on track and returning value already. Our board of directors and our senior management include more talent, and more diversity of talent, than at any time in this company's history. We are in position to begin to repay the federal government's TARP investments. For these reasons, I decided now is the time to begin to transition to the next generation of leadership at Bank of America."