Sep 30, 2009 10:30 pm US/Eastern
BofA CEO Ken Lewis Stepping Down At Year's End
NEW YORK (AP) ―
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Bank of America CEO Ken Lewis takes questions from the news media after he and other bank heads met with President Obama March 27, 2009, in Washington, D.C.
Chip Somodevilla/Getty Images
Ken Lewis, the embattled CEO of Bank of America Corp., is leaving the company, succumbing to nearly a year of strife that followed his company's acquisition of Merrill Lynch & Co.
The bank said in a statement late Wednesday that Lewis, 62, would retire as CEO and also leave the company's board by the end of the year. The company said his successor will be selected by the time he steps down Dec. 31.
The news, coming after shareholders had stripped Lewis of his chairman's title earlier this year, wasn't surprising because of the intense pressure he came under after the Merrill deal. Lewis had said he would stay on as CEO until after the company's financial problems were resolved, a process expected to take several years.
However, with the bank also under heavy criticism from government officials, Lewis was increasingly seen as vulnerable.
"He's had a big target on his chest for the whole Merrill Lynch deal, and I can only imagine the emotional stress he's endured," said Alan Villalon, senior research analyst at Minneapolis-based First American Funds, which owns Bank of America stock.
Since the Merrill deal closed Jan. 1, it was learned the investment bank with the knowledge of Bank of America executives gave billions of dollars in bonuses to employees even as it asked for more bailout money from the government. The deal was forged a year ago at the height of the financial crisis.
New York Attorney General Andrew Cuomo this month subpoenaed five members of Bank of America's board as part of an investigation into the Merrill deal.
Bank of America had settled a separate investigation last month into disclosures about the Merrill bonuses with the Securities and Exchange Commission, but a federal judge threw out that $33 million settlement, saying it was unfair and needlessly penalized the bank's shareholders. The judge ordered the case to go to trial Feb. 1.
Shares of Bank of America rose 23 cents to $17.15 in after-hours trading, after falling 24 cents to end the regular session at $16.92.
Investors may have some concerns over the lack of an immediate successor, but those will likely be temporary, Villalon said.
"They probably won't operate long without a CEO," he said. "If somebody comes from the outside, or even internally, it gives a set of fresh eyes."
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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Timeline: U.S. Credit Crunch & Financial Failures
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