NEW YORK (
) -- The pressure on Bank of America's board to not select an insider to replace Ken Lewis as chief executive has begun to heat up.
Finger Interests, an investment firm run by a high-profile father-and-son team, filed a notice with the
Securities and Exchange Commission
on Wednesday, urging shareholders to reject either of two top executives as leaders of the bank. Though the range of contenders is wide -- more than two dozen names have been floated as potential CEOs - Brian Moynihan, who leads consumer and small-business operations, and Chief Risk Officer Greg Curl, are thought to be neck-in-neck for the top spot.
"The current management team is tainted and not credible," the investment firm said in the filing, noting that no less than five government agencies are investigating executives' involvement with the BofA-
Finger Interests, run by Jerry and Jonathan Finger, has owned Bank of America stock since it was a small regional operator in North Carolina. Largely silent in the past, the firm has taken an atypical activist streak with regard to the Merrill merger. The Fingers played a key role in garnering shareholder support to vote Lewis out of his chairmanship in April, and believes the bank needs fresh leadership from outside its folds to improve its position.
Apart from Sallie Krawcheck, a former
CFO who joined BofA to run its wealth-management operations in August, the Fingers said bank leadership is not "focused on building shareholder value or increased transparency."
Other internal candidates named as potential successors to Lewis are Thomas Montag, one of the few Merrill bigwigs who stuck around to run global markets; Barbara Desoer, who runs the mortgage and insurance divisions; and CFO Joe Price. Two former CFOs have also been suggested: Alvaro DeMolina, who moved on to lead GMAC Financial Services after one too many scuffles with Lewis, and James Hance, who left in the 1990s when it became clear that he'd be passed over for the CEO role.
The Fingers' filing on Wednesday voices
that believes any executive involved with the Merrill deal is damaged goods. Such investors would prefer candidates like DeMolina or Hance, who are intimately familiar with BofA and can leverage their relationships and experience, or top guns from other banks like Charles Scharf, who heads retail banking at
CEO Robert Steel; or former
executives Jerry Grundhofer or David Moffett.
Another camp says bringing in an outsider would simply create too much turmoil, causing executives like Moynihan, Curl or others to leave while their breadth of knowledge is still needed to repair the firm. They also point out that it may be difficult to woo an outsider to a bank like BofA, with its expansive range of businesses, the ongoing Merrill investigations and integration, the company's debt of at least $45 billion to the government, and the close scrutiny from regulators until said debt is paid off to deal with.
The board has formed a committee to select Lewis' replacement before he leaves BofA on Dec. 31. It could also choose to select an interim replacement that would run the bank for a couple of years, while another candidate is primed for the job.
The committee includes Chairman Walter Massey, former FleetBoston directors Charles Gifford, Thomas May and Thomas Ryan; former
Chairman Charles Holliday, and former
Federal Deposit Insurance Corp.
Chairman Donald Powell. Some board members - former Bank One Vice Chairman William Boardman and former
President Robert Scully - were even cited as potential "emergency" replacements in case Lewis has to depart early due to the Merrill probes.
BofA shares were trading up 11 cents at $17.46 in late morning action.
-- Written by Lauren Tara LaCapra in New York