Bank of America CEO in Trouble?
March 24, 2009 by Stephen Kersey
Filed under Business
Ken Lewis, currently the CEO of Bank of America, may not have his position for too much longer if at least one shareholder has its way. Finger Interests Number One, an investment group that owns about .002% of the stock of Bank of America, wants Lewis replaced. Whether or not the wish will be granted will be decided at the April 29th shareholders conference.
Bank of America (Image: Flickr)
Finger Interests Number One is most peeved about a perceived lack of respect shown toward shareholders when Bank of America was buying Merrill Lynch. The investment group said that Merrill Lynch’s failing status wasn’t made available to shareholders until after the deal was completed.
Since the purchasing of Merrill Lynch, many banking industry experts have questioned Bank of America’s wisdom in taking on a company that lost more than $12 billion in the final quarter of 2008. Further questions arose after the facts came to light that Merrill Lynch paid nearly $4 billion in bonuses and incentives to its employees right before the purchase was completed.
To successfully remove Lewis from his CEO positions, the shareholders would have to rally together and form a majority during the voting stage of this year’s shareholders meeting.
Source: Wire Reports
It’s hard not to argue that Lewis overpaid for every acquisition and the shareholder has suffered the consequences. Countrywide and Merrill Lynch could have been picked up for close to nothing if he had been more patient and just waited a week or two longer.
On the flip-side, the piece-parts of BAC are first-rate and have a lot of potential earning power, and this looks to be one seriously undervalued stock assume the economy turns up.