Ken Lewis was ousted as chairman of Bank of America Corp. Wednesday after shareholders angry about the company's acquisition of Merrill Lynch & Co. voted to separate the job from that of chief executive.
CHARLOTTE, N.C. — Ken Lewis was ousted as chairman of Bank of America Corp. Wednesday after shareholders angry about the company's acquisition of Merrill Lynch & Co. voted to separate the job from that of chief executive.
Lewis will remain the CEO of the bank, but board member Walter E. Massey, the president emeritus of Morehouse College in Atlanta, will become BofA's chairman.
Shareholders narrowly voted at the bank's annual meeting Wednesday to split the jobs following months of rancor over the Merrill Lynch acquisition. After the deal was sealed Jan. 1, Merrill Lynch reported $15 billion in fourth-quarter losses and it was learned that Bank of America had approved the early payout of billions of dollars in bonuses to Merrill Lynch employees.
Lewis, who was chairman and CEO since 2001, has spent much of this year defending his actions — and did so again during the angry four-hour meeting.
Results of the voting were delayed for several hours, and Bank of America issued a statement that the board of directors had met Wednesday, elected Massey as chairman and unanimously voted to keep Lewis as CEO.
The bank said the shareholder proposal to separate the chairman and CEO jobs had passed 50.34 percent to 49.66 percent; it was the only shareholder proposal to be approved. Shareholders re-elected all 18 of Bank of America's directors, including Lewis.
Big investors including California's employee pension fund had called for shareholders to oust Lewis and his fellow directors at the meeting, which was attended by more than 2,000 people. Shareholders lined up early in the gathering to speak at microphones, with many hurling criticism at Lewis and the Bank of America board for the government-brokered purchase of Merrill Lynch.
"I find it incredible you didn't have the guts to stand up to the U.S. government," said Judith Koenick of Chevy Chase, Md., who said she lost thousands of dollars when BofA shares plunged after the Merrill Lynch purchase.
The government pressured Bank of America into buying Merrill Lynch during the same weekend in September that another investment bank, Lehman Brothers Holdings Inc., collapsed, setting off one of the most intense periods of the financial crisis.
Shareholder Gerald Abrams, of Boca Raton, Fla., also had an exchange with Lewis about the deal, asking, "what happened to due diligence" in Bank of America's investigation of Merrill Lynch's finances.
Lewis responded that Bank of America didn't anticipate the worsening credit conditions in the country, which elicited from Abrams, "why do the deal?" Lewis replied that it wasn't in the best interest of shareholders for Bank of America to pull out of the agreement.
Later, Abrams told a reporter, "I listened to Lewis and he came off like a good guy and a knowledgable guy, but I just can't see him staying."