Bank of America (NYSE: BAC) Board Face Difficult Decision in Naming Successor for Lewis

In a report by the Wall St. Journal, directors at Bank of America Corp. (BAC) are looking at a Thanksgiving deadline on whether to endorse a succession plan by outgoing CEO Kenneth Lewis.

In light of the bank’s current problems stemming from the collapse of the subprime and credit markets, the directors are deliberating between the stability of promoting internal candidates, with the benefit and risk of looking outside the company. Bank of America has been battered in the past year and some directors argue that the firm may need a leader who isn’t connected to any of the company’s current problems.

Mr. Lewis noted, however, that this approach, was not without the risk of top executives leaving the company.

Mr. Lewis presented three options to a board search committee on October 5. It is clear that Lewis would like to have the Board install 61-year old Gregory Curl as an interim chief. Mr. Lewis argues that the installation of Curl as interim chief would give younger candidates more time to mature.

Mr. Curl, who became the bank’s chief risk officer in June, is a behind-the-scenes deal advisor who was Mr. Lewis’ point man during a series of aggressive takeovers ending with the Jan. 1 purchase of Merrill Lynch & Co. Supporters say he is well respected by Wall Street and Washington, D.C., but some investors are wary of his involvement with the bank’s mega deals that saddled the company with additional risk and absorbed precious capital.

Mr. Curl’s appointment would give the board more time to assess three younger candidates as longer-term alternatives — Thomas Montag, the head of investment banking, consumer banking head Brian Moynihan and mortgages chief Barbara Desoer.

Mr. Lewis’s second option was to name the 49-year-old Mr. Moynihan as chief immediately. Mr. Moynihan, a holdover from the bank’s 2004 takeover of FleetBoston Financial Corp., has some powerful supporters on the board and has held an array of jobs inside the bank. His detractors, though, say he may lack the communication skills to inspire an employee base of 280,000 and may be too exposed to the company’s Merrill-related legal woes.

There were some inside the bank who wanted to go with one of Mr. Lewis’s internal suggestions as a way of calming turmoil and providing stability.

Still, some directors were in favor of hiring from outside the bank. Several preferred candidates were not interested, among them Barclays President Bob Diamond and Robert Kelly, CEO of The Bank of New York Mellon Corp.

The board is still considering Mr. Curl, Mr. Moynihan and at least two outside candidates, including Mr. Kelly, said people close to the process.