Dick Bove says that shareholders and management of Bank of America want outgoing Chief Executive Ken Lewis to stay.
The Rochdale Securities analyst has been a big supporter of Lewis. But today he took it a step further, saying that it appears shareholders and executives want Lewis to stay. His enemies are just politicians and bureaucrats who know nothing about banking, Bove wrote in a client note.
“He knows this company better than anyone else and he knows how to operate it … Convincing him to return would be the biggest morale builder that management could get,” Bove said.
Lewis surprised many by announcing his retirement in September. For months he had been subject to withering criticism from journalists and political types over the bank’s purchase of Merrill Lynch and the failure to disclose losses and bonuses to shareholders. He has been hauled before numerous inquiries into the losses and bonuses.
Not everyone agrees with Bove, of course. Last week, even before this latest note from Bove, Thomas Brown wondered why Bove was so obsessed with Lewis.
Dick, have you gone crazy? You’ve always had a soft spot for this egomaniacal, size-obsessed, value-destroying CEO. I can’t understand why. You think the government’s vendetta against Lewis has harmed shareholders? How about damage done by Lewis’s own misbegotten term as CEO, which was marked by one value-destroying deal after another and, before that, his role carrying out Hugh McColl’s long-term strategy of relentless dilution via serial acquisitions? The unquenchable McColl/Lewis deal machine, which finally choked on Merrill Lynch, is what brought BofA low in the end, not the government’s second-guessing of who Lewis’s successor should be.
I don’t know what about the company’s record under Ken Lewis “leadership” you don’t see. In particular, you say yourself that Lewis, and only Lewis, knows enough about BofA to run the company effectively. Whose fault is that? One of the key jobs of any CEO is to put in place a succession plan. Lewis didn’t, and look at the lurch he’s left the company in. In the meantime, he’s built an institution that the government views as too big to fail, employees view as too big to manage, and investors view as too big to grow. And you seem to think that’s a good thing.
Dick, get some therapy! Ken Lewis will be remembered as terrible CEO who drove his company into the ground, then left behind a senior management without a single individual capable of picking up the pieces. The sooner Ken Lewis is out of that executive suite, the better.
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