BofA's CEO Search Gets Tougher

Oh, and the pay isn't that great.

While the financial industry at large is going through a colossal shift in culture, BofA is still at a major disadvantage. Its decisions and salaries will face more scrutiny than competitors like JPMorgan Chase (JPM), Goldman Sachs (GS) and Morgan Stanley (MS), which have already repaid bailout funds, as well as others like Wells Fargo, which haven't but don't owe as much.

That's not to mention banks overseas UBS (UBS), Credit Suisse (CS) and Deutsche Bank (DB), that have charged in to snap up top talent with more lucrative pay packages, or those in the hedge fund and private equity industries doing the same.

For example, one man who might have been a contender for the BofA CEO spot is John Kanas, the former CEO of North Fork, with a reputation as a top operator. He is now running what used to be called IndyMac for a consortium of private equity firms. Another superstar banker, David Moffett, who was once the CFO of U.S. Bancorp (USB), might have also been in the running if not for his experience at Freddie Mac (FRE) earlier in the crisis. Appointed by the government to lead the troubled mortgage giant in September 2008, he left to return to the private sector after six months due to frustrations in dealing with regulators. One can assume BofA, while in far better shape than Freddie, is a less private venture than Mr. Moffett would like to pursue, especially if the pay is restricted.

Though the board could be criticized if it chooses an insider candidate, given the circumstances, loyalty may be the only incentive for a top banker to take the job. As the hunt for a replacement continues, BofA's board is reportedly mulling putting an emergency CEO in place who can assume Lewis' responsibilities on short notice in case he has to depart early due to legal matters related to Merrill. The company may also select an interim CEO for a couple of years to give in-house executives a chance to duke it out for the top spot.