It is no secret that Bank of America (NYSE: BAC) is struggling to find it’s next Chief Executive. Earlier this year, Kenneth D. Lewis announced that he was planning to leave his position at the end of the year amid a storm of controversy. But, as that time frame is quickly approaching, and no successor has emerged, it seems that he may end up staying on longer.
Compounding this problem is the fact that the firm is dealing with a myriad of issues right now – first, the Charlotte location is not optimal for most members on their list of potential candidates, and in the last month the Board has went as far to say that they would be open to changing the geographic location for the CEO, to stay closer to it’s other business units. Second, with the oversight of compensation Czar Kenneth Feinberg, the pay package for the next CEO would need to be vetted and approved. Lewis gave up his 2009 salary at Feinberg’s urging, though a deal like that with the next CEO would be highly unlikely.
Richard X. Bove, the outspoken bank analyst from Rochedale Securities, reinforced this growing sentiment, noting that the best person for the job is right under the directors’ noses: Ken Lewis. After speaking with shareholders, current management and other Bank of America stakeholders about the issue this week, Mr. Bove now says he believes that it is conceivable that Mr. Lewis could stay to lead the company. “There is a real effort to get him back,” Mr. Bove told DealBook on Friday morning regarding Mr. Lewis. “Every major institution I spoke with that owns a position in Bank of America thinks he should be back.”
The Wall Street Journal reported earlier today that Kenneth Lewis has said he would consider postponing his retirement if directors need more time to find a successor or smooth the transition to the next CEO, according to a person close to him. This may be a viable solution, though merely only delays the inevitable.
Bank of America needs to get the house in order, and develop a clear vision of their future. Integrating Merril Lynch and Countrywide is an immediate and pressing issue, and then the firm can work towards repaying it’s TARP funds and move forward. The CEO must provide a vision for the future, so even if Lewis extends his run 6 months, it will still lack the clear direction the firm needs.
