The winds of change continue to blow against
Bank of America's
Wall Street Journal
said Friday that regulators are pressuring BofA to shuffle its board to include more directors with experience in the financial services industry. It would not be the first time the government has stepped in to replace or urge change in the top ranks of troubled companies receiving taxpayer support.
American International Group
have made changes to their boards and executives at the behest of regulators.
However, each of those firms has received far more government assistance, making the BofA case unusual. Also, many of Bank of America's problems stem from its acquisition of the teetering investment bank Merrill Lynch, which was completed after allegedly heavy-handed pressure from Treasury Secretary Henry Paulson and
Chairman Ben Bernanke.
While the Journal, citing anonymous sources, didn't say that regulators are pushing CEO Ken Lewis to resign, a move to reshuffle BofA's board could put added pressure on him. Shareholders who were angry about the Merrill deal and the firm's stock performance stripped the CEO of his chairman title at
BofA's annual meeting in late April.
Spokesman Robert Stickler told the
that all banks were required to review their boards and management, and Lewis "got the shareholder message" and found the vote "humbling."
During a conference call on Monday, Lewis deflected questions about when he planned to leave the firm, and who would replace him, by saying "that's the board's decision." He repeated his desire to stay on board until the firm begins to repay the $45 billion in government funds it has received.
"I would like to see us at least start to be able to pay back the government money, if not do it all, and then kind of regroup and then decide how much energy I have left, and how well prepared are we to make the transition," Lewis said. "Fortunately, we have several people inside the company that I think would be very good successors, all of whom will go unnamed."
Names that have been floated as
potential successors include Brian Moynihan, who is overseeing Merrill Lynch; Barbara Desoer, who heads BofA's mortgage business; and CFO Joe Price. However, Lewis noted that while there are candidates on BofA's slate, he wouldn't name them outright because "it could change and there could be somebody that pops up."
Lewis was replaced as chairman by longtime board member Walter Massey. But that is also likely to change over the next year, since Massey will reach the mandatory retirement age of 72 within that time frame. According to BofA's Web site, few other directors have extensive experience in financial services, including the two embattled directors who some shareholders sought to oust: lead director O. Temple Sloan and Jackie Ward, who leads the asset quality and executive compensation committees.
Sloan was formerly CEO of automotive firm General Parts International and Ward was former CEO of Computer Generation Inc. Others include William Barnet, head of The Barnet Company, a textile processing firm; Frank Bramble, former CEO of MBNA, the credit-card company Bank of America acquired in 2006; Virgis Colbert, senior adviser of MillerCoors, part of the beer company
; John Collins, head of consulting firm The Collins Group; Gary Countryman, director and former chairman of Liberty Mutual; Tommy Franks, a retired Army general; former BofA Chairman Charles Gifford; Monica Lozano, publisher and CEO of the Spanish-language publication
; Thomas May, CEO of the utility company NSTAR; Patricia Mitchell, president and CEO of the Paley Center for Media; Joseph Prueher, a retired Navy admiral; Charles Rossotti, senior adviser to private equity firm The Carlyle Group; Thomas Ryan, CEO of pharmacy-retailer company
; and Robert Tillman, former head of