Partial coup at Bank of America
Bank of America seems to be in a state of denial about the partialcoup d'etat that was just carried out by the company's shareholders,who took the remarkable step of ousting Ken Lewis from the chairman'sjob. BofA put out a press release withthe vague title "Bank of America Announces Results from Annual Meeting"that never mentions the demotion of Lewis, who was kept on as chiefexecutive. It simply announces that non-executive director Dr Walter E.Massey, president emeritus of Morehouse College, had been selected forthe chairman's post.
Moreover, as of this writing, the About page onthe BofA website contains a box headlined Leadership with a quote fromLewis, who is still identified as chairman. The quote reads: "Bank ofAmerica helps build strong communities by creating opportunities forpeople -- including customers, shareholders and associates -- to fulfilltheir dreams."
As I described in my previous post,Lewis spent four decades at BofA and its predecessor companiesfulfilling his dream -- or more strictly, that of his mentor Hugh McColl-- of conquering a long list of competitors and creating a financialleviathan that today has the dubious distinction of being deemed to betoo big to fail. Now his personal part of that dream is crumblingbefore him.
As hard as BofA's p.r. people may try to downplay it, the company'sinvestors have just presented Lewis with a resounding vote of noconfidence. Although the attempt to kick Lewis off the board entirelydid not succeed, his loss of the chairmanship is a humiliating defeatand may make it untenable for him to remain in the CEO post.
What was a sad day for Ken Lewis was a remarkable victory forshareholder activism and a serious setback for those top financialexecutives who seem to think they can avoid any personal consequencesfrom mismanagaging their banks to the point that they need to bepropped up with vast sums of taxpayer money. The uprising of the BofAshareholders should also send a strong message to the largest owner oflarge banks -- the federal government -- that the time has come to gettough with the banking barons.
Phil Mattera is editor of Dirt Diggers Digest, where a version of this story originally appeared.