There is a potential disaster looming at Bank of America (NYSE:BAC) concerning its CEO situation, where nobody with any brains would want to accept the position, as government attacks on Ken Lewis would assuredly continue on with his successor.
Lewis has of course come under heavy scrutiny from the deal made for Merrill Lynch and the bonuses worth billions kept in place with government help.’
What makes it much worse is the part played by government officials in pressuring Lewis and other Bank of America officials to make the deal with Merrill Lynch happen, after Lewis was seriously looking at passing on the deal. There have even been hints of undue pressure from former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.
In a note to clients, Richard Bove reminded them the circumstances surrounding Edward Liddy and Robert Benmosche, who ran American International Group as CEOs, which is under government control after being bailed up with taxpayer funds. Bove stated that any candidate with legitimate credibility wouldn’t have any reason “to take a post where they may be hounded to be government automatons.”
“An outside candidate must be willing to take a cut in salary; give up his or her independence in running the business; and subject themselves to congressional and press attacks,” Bove added.
Another analyst, Michael Mayo of Calyon Securities USA, also stated in a note to investors on Friday that is a factor connected to finding a quality and legitimate CEO for Bank of America because “regulatory roulette or the uncertain influence and control that the government may have on the business … Under this scenario, why would any successful CEO want the job?”
A growing number of industry-watchers believe the biggest problem for finding a good CEO for Bank of America is the Obama executive compensation czar Kenneth Feinberg, whose socialist policies concerning controlling pay and interference in running the company ensure no real candidate will emerge.
Now that this is increasingly being understood, the idea of keeping Ken Lewis in getting more attractive as the days go on, as the longer it takes and the more qualified candidates reject the job, the more scrutiny will come upon the socialist tendencies of the Obama administration, and whoever eventually steps into the CEO role of Bank of America would come with far less believability than someone searched, approved and appointed by the board of the company.
The problem from the beginning in this mess was the government looking for a scapegoat in order to take the attention off of their part in the shenanigans, which birthed the outrage in the first place.
I also think some of this is positioning of some in the government for possible litigation in the future, as the real story emerges on the part played by government financial leaders in bringing about the entire situation through pressuring Bank of America to make the deal for Merrill Lynch they were at the brink of rejecting.
This is why the SEC couldn’t find anyone in the company that did wrong in the company over Merrill Lynch, as it seems it was government officials themselves that were involved in making the deal go forward.
Potential candidates to replace Lewis know this to be true, and probably more than the general public knows, and are in no way going to set themselves up, not only for failure, but a repeat of the public lynching of Lewis who was probably, in the end, forced to make the deal through veiled and/or outright threats.
