Ken Lewis had a choice. Stand up to Paulson and Bernanke for his shareholders… or cave and buy Merrill Lynch.
As today’s revelations show, he put America over Bank of America (BAC). We’re actually sympathetic to his choice. Here he is, with the financial system collapsing around him (and it really was collapsing) and the Fed and Treasury Chief are telling him that if he doesn’t go through with the acquisition, he and the rest of the board could be fired. Tough choice.
But angry Bank of America shareholders who have been lobbying to split up the Chairman and CEO roles at the company think this could be the death blow.
The Deal surveys the reaction among those who will be agitating for a change at the company’s annual meeting next week.:
“He violated his duty to protect shareholders in order to protect himself, and now shareholders are shouldering the burden of those consequences,” CtW Investment Group’s Michael Garland told Dealscape.
“Seems like Ken Lewis has changed his story. Previously Mr. Lewis has stated unambiguously that Bank of America was not aware of the losses at Merrill Lynch until after the Dec. 5 shareholder vote. Now he states differently. I think this will certainly strengthen our lawsuit,” Jonathan Finger of Finger Interests Number One Ltd. told Dealscape.
Eric Jackson of Ironfire Management, who you may know from his campaign at Yahoo last year, already thought Lewis was Kaput, even before today’s revelations:
Next week, on April 29th, Bank of America (BAC) will hold its annual meeting. An issue which will come to a head there in a shareholder vote is whether Ken Lewis should retain the two roles of Chair and CEO.
Longtime BAC shareholder Jerry Finger (who sold his bank to NationsBanK in 1996) put the issue on the proxy and is right to call for change, given the bank’s disastrous performance in the last 12 months.
Late last week, we learned the 3 largest and most influential proxy advisory firms (RiskMetrics, Glass Lewis and ProxyGovernance) all threw their support behind the splitting of these roles. This means it’s virtually assured that the split will happen, given how closely large institutions and pension funds follow these suggestions from the advisory firms.