The Board of Directors of Bank of America (NYSE: BAC) is slated to meet next week and may discuss a new Chief Executive Officer (CEO) to succeed the retiring Kenneth Lewis who is set to retire at the end of this year. The Tuesday meeting is a regularly scheduled one, and though no formal agenda item for a new CEO exists, Bank of America spokesman Bob Stickler said that the topic would likely come up in course of the Boards’ normal business discussions.
The current CEO of Bank of America, Kenneth Lewis, announced his retirement at the end of September amid a multitude of internal and external problems, a slumping economy, and news that he may face civil charges from New York Attorney General Andrew Cuomo over disclosures of Merrill Lynch bonus payments just before the Bank of America acquisition in January. There has been speculation that government pressure on Lewis to improve the risk management and succession planning at the company contributed to his decision to resign, though government officials and people familiar with the situation deny that there was ever explicit impetus placed on Lewis by the government to resign his post.
Bank of America’s Board of Directors has been conducting interviews of both internal and external candidates for the CEO position, but the lack of a clear successor to Lewis has fueled speculation about the stability of the giant bank. Bank of America is still saddled with huge losses on bad mortgages and consumer loans, and investors continue to be concerned that new government regulations and a struggling economy could weaken the banks’ earnings in the future. Potential candidates are also leery of the uncertain level of government involvement from everything to daily operations to executive pay, and governmental oversight burdens are significant factors for potential candidates to consider.
Kenneth Lewis has been the CEO of Bank of America since 2001 and is widely credited with guiding the bank into the juggernaut it is today, as the nations largest holder of assets, and completed several dramatic acquisitions including Countrywide Financial In July 2008 and Merrill Lynch early the next year. Lewis initially indicated that he wanted to stay on board until Bank of America repaid the $45 billion in federal bailout funds it accepted. As recently as July he told investors that he saw himself as “the one most capable of getting us to the other side”, but pressure and criticism from all angles continued to fuel his desire to resign.