Bank of America CEO Scrum Begins as Lewis Revamps Management

Bank of America Corp., under pressure to overhaul management and reduce risk, set up a five-person competition to replace Kenneth Lewis as chief executive officer.

The bank yesterday shuffled senior management and paid $33 million to settle U.S. claims it misled investors while buying Merrill Lynch & Co. Liam McGee, who headed consumer banking, left and was replaced by Brian Moynihan in a division that has provided most of the Charlotte, North Carolina-based bank’s revenue and profit.

Moynihan, 49, who ran wealth management and corporate and investment banking, is the top CEO candidate, according to analysts including Richard Bove of Rochdale Securities. Possible successors include ex-Citigroup Inc. executive Sallie Krawcheck, hired yesterday to head wealth management, home-lending chief Barbara Desoer and Chief Financial Officer Joe Price. Also in the running is Tom Montag, a Goldman Sachs Group Inc. veteran.

“Brian is in a bull’s-eye position,” said Nancy Bush, an independent bank analyst in Annandale, New Jersey. “After he’s run consumer banking, he will have run the bank’s three major businesses, and no one else can make that statement.”

The Merrill acquisition, capstone of Lewis’s $120 billion of purchases since he became CEO in 2001, led shareholders to strip his chairman’s title and sparked a congressional investigation. The bank, which has had three CEOs since 1973, hasn’t previously disclosed succession plans, said Marion Ellis, a Charlotte author who wrote a history of the company.

The new post is Moynihan’s fourth job since December 2008. He’s worked as head of corporate and investment banking, general counsel and most recently, head of both investment banking and wealth management. He joined the bank through the 2004 acquisition of Fleet Boston Financial Corp.

‘Most Powerful’

“The person who runs the retail bank is the most powerful person at Bank of America after Ken Lewis,” Bove said in a Bloomberg TV interview.

Lewis said in a statement the management shuffle and succession plan reflects a need for “new talent” and “new perspectives.” Bank officials have declined to discuss the specific role regulators are playing as pressure from outside forces changes, investor Mike Holland said.

link.....