When Ken Lewis lost his job as chairman of Bank of America’s board of directors, we warned him that he might soon find himself stripped of his role as chief executive.
That’s exactly what happened at Wachovia after the board split the roles of chairman and chief executive. Despite all the reassuring noises about the board’s support for the CEO, one month later he was gone.
And although Lewis and Bank of America deny he was forced out, not everyone is convinced. CtW Investment Group- executive director William Patterson says shareholders forced out Ken Lewis as CEO of Bank of America.
Ken Lewis’s resignation as CEO is the overdue but inevitable result of the overwhelming shareholder opposition registered at Bank of America’s 2009 annual meeting. At that meeting, shareholders stripped Lewis of his chairmanship and cast an unambiguous vote of no confidence in his continuing as a director. The onus is now on the board of directors to engage with shareholders to name a successor who can quickly restore the bank’s credibility with investors, regulators and Congress.
CtW is an politically driven union-affiliated group that has long called for shareholders to vote off Lewis, so it’s not surprising that they are cheering now.
“Mr. Lewis is responsible for an ill-advised acquisition of Merrill Lynch that transformed a bank well positioned to weather the financial crisis into one of its most costly casualties. Subsequent missteps have further compromised his credibility with investors and regulators,” the group said in April.
According to its website, CtW Investment Group “works with pension funds sponsored by unions affiliated with Change to Win, a federation of unions representing nearly 6 million members, to enhance long-term shareholder returns through active ownership. Members of CtW affiliates participate in Taft-Hartley plans with an estimated $217 billion in assets.”