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Sunday 11 October, 2009

Search for BofA chief heats up

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Bank of America Corp. is gearing up its search to replace chief executive Ken Lewis, with a six-member CEO transition committee planning to meet several times this week.

The committee plans to name a successor as quickly as possible, spokesman Bob Stickler said. The board hasn't yet disclosed whether it will hire an executive search firm. Lewis announced plans last week to depart Dec. 31.

Separately, the Charlotte bank on Monday launched a $20 million advertising campaign for its Merrill Lynch wealth management brand, even as the bank faces a raft of legal and regulatory investigations over the Merrill deal - most focused on whether the bank properly informed shareholders about rising losses at Merrill and bonuses that were awarded to its employees.

Stickler declined to comment on whether a separate board committee is working to identify an emergency CEO who could step in if Lewis departs earlier than his planned Dec. 31 exit date, as reported Monday by the Wall Street Journal. The board wants a contingency plan in case Lewis' Merrill-related legal woes escalate, the Journal reported.

Asked whether Lewis could leave earlier than planned, Stickler said Lewis intends to stay through Dec. 31, and he declined to speculate on future events.

The CEO hunt has raised concerns in Charlotte because half of the search committee's members are former FleetBoston Financial Corp. directors. They are known to be close to consumer banking executive Brian Moynihan, who has stayed in Boston since he came aboard in Bank of America's 2004 acquistion of Fleet.

While Moynihan is seen as a frontrunner among internal candidates, another potential successor, new wealth and investment management president Sallie Krawcheck, was in the spotlight Monday as she debuted Merrill's advertising effort at a New York news conference.

The former Citigroup executive declined to comment on Lewis' succession, except to say she was "here because I love the wealth management business."

The outside candidates who continue to get buzz among bank insiders are two former Bank of America chief financial officers: Jim Hance Jr. of the Carlyle Group private-equity firm, and Al de Molina, CEO of GMAC Financial Services. While they're known inside the bank, the board making the selection has undergone major changes since their tenures.

As the news sinks in about Lewis' departure, people familiar with the bank are also wondering about other possible executive changes. The most likely to depart with Lewis may be his chief administrative officer and close confidant, Steele Alphin. The bank has a tradition of changing CEOs and personnel executives at the same time.

Two others who could depart with a CEO change are chief risk officer Greg Curl and chief financial officer Joe Price, although they're both also considered candidates for the top job. When Bob Steel took over at Charlotte's Wachovia Corp. last summer, those two positions were the first to turn over.

"No one has announced any plans to leave," Stickler said.

As the CEO speculation continues, the bank is rolling out its campaign to promote the financial advisers that sell stocks, bond and mutual funds to clients nationwide, the part of Merrill that Lewis called a "crown jewel" when he announced the acquisition last fall.

The "help2" campaign, which is running on TV and in newspapers, is meant to speak plainly to clients who are still nervous about their financial future. Merrill's iconic bull is a prominent feature. The campaign is meant to appeal not just to clients, but also to Merrill's famous "thundering herd" of financial advisers. They were a key reason Bank of America decided to purchase Merrill, and the bank is eager to retain them.

Krawcheck said the bank has been adding financial advisers - a net of 46 last week - and now has slightly fewer than 15,000. A year ago, when Bank of America announced it was buying Merrill, the New York investment firm had about 17,000 advisers. Bank of America had another 2,000. Krawcheck said the bank hasn't decided how many financial advisers it ultimately will need.

Claire Huang, who heads marketing for Bank of America's wealth management and related units, said the advisers have been the bank's heroes in a difficult year.

"Our brand has been hit hard by all the media and the press and the understandable issues that are everywhere," Huang said in an interview. "But the one thing that hasn't been hit hard is the image of our financial advisers. ... People who got help from our financial advisers really felt good about the advice that we gave them."

In the eyes of many analysts, the financial advisers who came from legacy Bank of America are less profitable than their Merrill Lynch peers. But Huang called the Bank of America advisers "highly performing."

"They've been welcomed wholeheartedly by the Merrill Lynch team," she said. "They're definitely not stepchildren."

Bank of America is spending about $20 million on the help2 campaign, also known as "help to the second power," for the fourth quarter. That's more than Merrill spent on any of its campaigns, bank officials said.

Although she declined to comment on the CEO post, Krawcheck, 44, talked about her quick hiring at Bank of America. She said she was running on a Friday in July when she got a call asking if she could talk to Sandy Weill, the former Citi CEO. Weill asked if she would entertain a call from Bank of America.

"Of course I'd been sitting home on the sofa for the better part of a year, so I had the advantage of having thought long and hard" about what the wealth management industry should look like, Krawcheck said, joking her "kids, who are teenagers, wanted very little to do with me, so it was a lonely 10 months."

Krawcheck had already studied Bank of America, both as a competitor and as a financial analyst, and was impressed. She talked to Lewis the next Monday and was at work a week later. She said Lewis stressed the importance of teamwork, saying the way to fail as an executive was to "go it alone."

Krawcheck is based in New York but said she's been down to Charlotte "every couple of weeks" since she started her new job. Krawcheck, who grew up in South Carolina and graduated from UNC Chapel Hill, said she's "probably the biggest UNC basketball fan on the planet."

She said her background makes her suited for her new position: "I speak wealth management, I speak bank, and I speak Southern."

Article source:http://www.charlotteobserver.com/597/story/986827.html?storylink=omni_popular

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