BofA's Lewis Declines Bonus: Report

Updated from 1:26 p.m. EST

Bank of America (BAC) CEO Ken Lewis is recommending that he and other top executives should not receive bonuses for 2008, as the bank's earnings will be below expectations, according to media reports citing an internal memo.

The Charlotte, N.C.-based bank's board still has to verify Lewis' recommendation, the reports said.

Analysts polled by Thomson Reuters, on average, forecast fourth-quarter earnings of 15 cents per share on revenue of $20.9 billion, and 2008 earnings of $1.23 per share on revenue of nearly $78 billion. Bank of America is expected to report earnings Jan. 20.

Lewis confirmed the decision in an email sent to his eight direct reports Tuesday afternoon. Bank of America spokesman Scott Silvestri confirmed Lewis' actions and recommendation to The Associated Press.

The move puts Lewis on a long list of CEOs in the U.S. financial services industry to decline bonuses this year, including top executives at Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C). Former Merrill Lynch CEO John Thain also declined a bonus earlier this year. He became president of Bank of America's global banking, securities and wealth-management division when the acquisition closed.

The report is the second setback for BofA in 24 hours, though its shares were still up Tuesday. Late Monday, the bank announced the surprise departure of Bob McCann, head of Merrill Lynch's brokerage unit. The departure fuels critics who say BofA won't be able to retain the acquired investment bank's heralded "thundering herd."

Merrill's team of more than 16,700 financial advisors in 750 offices around the world is frequently cited as the major reason BofA made the acquisition, which closed Jan. 1. However, there have been concerns Merrill's best brokers would leave BofA, where they might be compensated less and generally viewed as less important to the overall mission of the company.