This really is great news, and "attaboy". (0.00 / 0)

It is definitely a rewarding and encouraging development.    

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by: dkmich @ Wed Apr 29, 2009 at 22:47:46 PM UTC

if he's still CEO, how is this a win? (4.00 / 1)

a win would be him not being either.

Chairmen of the Board are not at all as important as CEOs in the running of a company day-to-day -- and Boards don't even meet that often.

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by: amberglow @ Wed Apr 29, 2009 at 22:48:46 PM UTC

Same question: How is this a win? (4.00 / 3)

CALPERS is about a thousand times more influential at BoA than the sum total of all bloggers, and CALPERS wanted to fire Lewis and the whole board, and instead...

They gave half of Lewis' job to a board member, and Lewis kept the rest.

This is obviously a big win for Lewis, and trying to sell it as a win for progressives is just plain weird.

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by: Jacob Freeze @ Thu Apr 30, 2009 at 00:45:18 AM UTC

[ Parent ]

yup -- if even giant shareholding entities couldn't get rid of him, (4.00 / 1)

and the govt refuses to do so, there's no win at all -- only continued loss to us -- and the country.

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by: amberglow @ Thu Apr 30, 2009 at 00:58:18 AM UTC

[ Parent ]

Vote of no confidence on Ken Lewis (0.00 / 0)

What happened today was a vote of no confidence on Ken Lewis in all of his work at BofA.  The shareholders took the first step to take him down by separating him from his role as chairman of the board.  It was the first time ever that shareholders have been able to amend the corporate by-laws in a proxy vote of an S&P 500 company.

This was the first step.  It's a huge vote move that is the beginning of serious reform at Bank of America and the rest of the financial industry.

Here's the statement from the SEIU Master Trust, which sponsored this resolution:

http://www.seiu.org/2009/04/se...

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by: Michael Whitney @ Thu Apr 30, 2009 at 01:48:24 AM UTC

[ Parent ]

Somehow this makes it sound even more pitiful. (0.00 / 0)

There's nothing between BoA and oblivion except us taxpayers, and for all our tens of billions of dollars in hand-outs, what do we get?

Total ownership and control of a bankrupt bank with literally nothing in it except our money?

No, of course not!

What we get is the first amendment of "corporate by-laws in a proxy vote of an S&P 500 company."

Maybe if we gave them another $100 billion, they would give us a toaster.

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by: Jacob Freeze @ Thu Apr 30, 2009 at 12:57:30 PM UTC

[ Parent ]

Stockholders don't (0.00 / 0)

vote on CEO, they vote on the Board.  Only the Board can hire and fire the CEO.

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by: fladem @ Thu Apr 30, 2009 at 13:49:25 PM UTC

[ Parent ]

It was predicted... (0.00 / 0)

Documentation showed clearly that the govt gave BAC an ultimatum; CEO Lewis caved (out of self-interest and preservation); and didn't have much choice in the matter in acquiring Merrill Lynch; thus bringing down the company's equity a few notches...WallStJournal had reported last week:

New York's attorney general urged federal regulators to scrutinize the pressure applied by former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to Bank of America Corp.'s chief executive as the bank wrestled with its takeover of Merrill Lynch & Co. A slew of documents sent by New York Attorney General Andrew Cuomo to Washington officials on Thursday detail negotiations between BofA CEO Kenneth Lewis and federal officials and demonstrate the extent to which senior officials were influencing the decisions of a public company.

Bank of America Chairman and CEO Kenneth Lewis testified under oath in New York Attorney General Andrew Cuomo's investigation in February. During the testimony, Mr. Lewis told prosecutors that then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke instructed him to keep silent about deepening financial difficulties at Merrill Lynch.
In a letter today to members of Congress and the head of Securities and Exchange Commission, Mr. Cuomo called into question the transparency of the decision making in the process.
Here are highlights from the transcript.
Here, Mr. Lewis testifies about when he learned of Merrill's deepening losses:
Mr. Lewis: I want to make sure I get the date right. I'm pretty sure it was December the 13th if that's a Sunday because I was in New York, and I was about to go home -- and what triggered that was that the losses, the projected losses, at Merrill Lynch had accelerated pretty dramatically over a short period of time, as I recall, about a week or so.
Q: How did you come to learn of that?
Mr. Lewis: Joe Price, our CFO, called me.
Q: Take me through what Mr. Price communicated to you on that call.
Mr. Lewis: He basically said what I just said: The projected losses have accelerated pretty dramatically. We earlier on had more days in the month, so that it was a possibility that at least some of the marks could come back, but now we had not very many business days because Christmas was coming and all of that. So we became concerned just of the acceleration of the losses.
Mr. Lewis testifies about his discussions with Mr. Paulson about the possibility of Bank of America walking away from the Merrill deal, citing the "material adverse effect" clause, or MAC, in its merger agreement:
Mr. Lewis: I remember, for some reason, we wanted to follow up and see if any progress -- as I recall, we actually, had not agreed to call a MAC after the conversation that we had, and so I tried to get in touch with Hank, and, as I recall, I got a number that was somebody at the Treasury kind of guard-like thing. He had a number for Hank, and Hank was out, I think, on his bike, and he -- this is vague; I won't get the words exactly right -- and he said, "I'm going to be very blunt, we're very supportive of Bank of America and we want to be of help, but" -- I recall him saying "the government," but that may or may not be the case -- "does not feel it's in your best interest for you to call a MAC, and that we feel strongly," -- I can't recall if he said "we would remove the board and management if you called it" or if he said "we would do it if you intended to." I don't remember which one it was, before or after, and I said, "Hank, let's deescalate this for a while. Let me talk to our board." And the board's reaction was one of "That threat, okay, do it. That would be systemic risk."

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by: mariann @ Wed Apr 29, 2009 at 23:49:38 PM UTC

even while they talk about "too big to fail" as a problem, they ensured BOA got even bigger -- (0.00 / 0)

it's appalling.

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by: amberglow @ Thu Apr 30, 2009 at 00:09:12 AM UTC

[ Parent ]

Yeah, big victory. (4.00 / 1)

He's still on the board, and he's still CEO.  Not Chairman anymore, though.  Seems like he at least could have had the other wrist slapped, as well.

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by: Querent @ Thu Apr 30, 2009 at 03:13:25 AM UTC

That wasn't up for discussion today (4.00 / 3)

That's the decision of the Board of Directors.  And when you have the CEO and the Chair of that Board as the same person, you can have problems making the right decisions.

So this was a vote of no confidence on Lewis - step one, if you will.

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by: Michael Whitney @ Thu Apr 30, 2009 at 04:00:26 AM UTC

[ Parent ]

Should be verboten that a CEO can be chairman at the same time! (4.00 / 2)

It doesn't make any sense, and will only result in CEOs even more ruthlessly seeking higher bonusses at the expense of other employees and the shareholders. The chairman should be the leading position of a board devoted to oversight. But a CEO conducting oversight of his own actions is a ridiculous travesty of the whole idea! Can't understand why the SEC allows such crap.

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by: Gray @ Thu Apr 30, 2009 at 12:41:00 PM UTC