BofA CEO Moynihan Appointed Chairman as Crisis Era FadesHugh Son
Bank of America Corp. named Chief Executive Officer Brian T. Moynihan chairman of the board after he led the firm through legal battles from the financial crisis and won regulatory approval to boost its dividend.
He succeeds Charles “Chad” Holliday, 66, who remains a director, the Charlotte, North Carolina-based bank said yesterday in a statement. Jack Bovender, 69, who joined the board in August 2012, was elected lead independent director. The changes take effect immediately.
Moynihan, who turns 55 next week, is approaching his fifth anniversary as Bank of America’s CEO. He’s gaining a title after spending much of his time, and more than $70 billion, dealing with the fallout from his predecessor’s acquisitions of Merrill Lynch & Co. and Countrywide Financial Corp.
“Nobody thought this was going to last, very few companies keep the roles split,” said Nell Minow, former director of GMI Ratings, which evaluates governance risks at public companies. “They’re saying, ‘We’re back to business as usual.’ In theory, they’re saying the right things -- you want to see the lead independent director play a meaningful role.”
Bovender will help Moynihan set and approve the board’s meeting agendas, advise him on directors' information demands and call meetings, the bank said.
Citigroup Inc.’s Michael Corbat, 54, is now the only CEO without the chairman’s title at the six biggest U.S. banks. Bank of America split the jobs in April 2009, stripping then-CEO Kenneth D. Lewis of his chairmanship amid investor anger with management’s handling of the Merrill Lynch takeover.
“There’s more work ahead, but Brian’s strategy to simplify the company and connect it with the real economy continues to build value for shareholders,” Holliday said in the statement.
An Ohio-born lawyer who rose through the ranks at FleetBoston Financial Corp. before its 2004 acquisition by Bank of America, Moynihan outlasted other executives in late 2009, as talks with candidates from rival firms including Bank of New York Mellon fell apart.
Moynihan initially struggled to manage the scope of losses tied to Countrywide, the biggest mortgage lender during the U.S. housing bubble. He told investors in January 2011 that costs tied to defective home loans sold to Fannie Mae were a thing of the past. Instead, the expenses piled up, including two more settlements with Fannie Mae, plus deals with mortgage-bond insurers, private investors and the U.S. government.
The CEO won a higher dividend in August, boosting it to 5 cents a share. An earlier request was postponed in April because the lender mistakenly inflated capital levels by $4 billion. The dividend had been a token penny-per-share since 2009.
Bank of America shares have returned 14 percent, including reinvested dividends, since Moynihan took over as CEO at the start of 2010. That trails the 80 percent return for the 24-company KBW Bank Index.
His appointment follows management changes in August, when Thomas K. Montag became sole chief operating officer after sharing the role with David Darnell. Montag, 57, a former co-head of trading at Goldman Sachs Group Inc. who runs investment banking and trading at Bank of America, has earned more than Moynihan for four straight years.
Other bank CEOs who hold the title of chairman include JPMorgan Chase & Co.’s Jamie Dimon, Goldman Sachs’s Lloyd C. Blankfein, Wells Fargo & Co.’s John Stumpf and Morgan Stanley’s James Gorman.
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