BofA Investors Strip Lewis of Chairman Title

Updated from 5:50 p.m. EDT

Bank of America (BAC Quote) shareholders voted to oust CEO Ken Lewis from his role as chairman of the board by a narrow margin Wednesday, as investors at the company's annual meeting expressed disappointment with his handling of the Merrill Lynch deal and the bank's slumping shares.

Director Walter Massey was chosen to replace Lewis as chairman, though Lewis will maintain his positions as president and CEO, the company said. All 18 directors were voted in by what BofA characterized as "comfortable margins." Seven other proposals were rejected.

Some angry shareholders have been making a strong push to rebuke Lewis, who they say made poor decisions regarding the Merrill acquisition, which helped push BofA's shares down significantly. Though BofA shares closed up about 6.5% at $8.68 amid a broader rally Wednesday, they are down nearly 40% for the year and nearly 80% over the past 52 weeks.

During the meeting, Lewis acknowledged that 2008 was "a very difficult year" and that BofA shareholders "have carried a heavy burden recently."

One key point of contention is whether BofA will have to raise more capital at the conclusion of recent government stress tests of the nation's 19 largest banks. The Wall Street Journal on Tuesday reported Citigroup (C Quote) and BofA were being pushed to raise more money.

Options for BofA include converting preferred equity stakes into common shares, as Citi did earlier this year, but that would dilute current shareholders.

"We're still waiting to hear from our regulators about what will be required, so we don't have enough information at this point to make a decision," Lewis said at the top of the meeting, in response to whether it might pursue a conversion. Lewis also said he could not discuss details of the stress tests, which are not yet complete, until he gets the green light from regulators.