BoA replaces chairman

by Gill Montia

Story link: BoA replaces chairman

Bank of America (BoA) has a new chairman as yesterday, shareholders voted in favour of Kenneth Lewis relinquishing the post.

However, Mr Lewis will continue as the bank’s chief executive, despite a large numbers of investors favouring his complete removal from the board.

Tensions between Mr Lewis and investors centre on the group’s $50 billion acquisition of Merrill Lynch during the financial turmoil of last autumn.

The swift action on the part of the former chairman in acquiring the bank was initially applauded but during the final quarter of 2008, Merrill posted a record loss of $15.31 billion.

While Mr Lewis was reportedly aware of the scale of impending loss when the takeover was agreed, shareholders were not told.

The fact that Merrill added $3.7 billion to BoA’s first-quarter 2009 net income has done little to heal the rift, which has been fired by rumours that Mr Lewis was coerced into the takeover by US authorities.

He therefore stands accused of acting against the interests of BoA investors, who have seen the price of the group’s stock plummet since the acquisition.

Mr Lewis has been replaced as chairman by Walter Massey, a board director at BoA since 1998.