Bank of America shareholder suggests 18 names to replace Ken Lewis

Finger Interests, a large shareholder in Bank of America Merrill Lynch, has pressed the case for an external candidate to replace Ken Lewis, and has even suggested 18 potential CEOs.

Houston-based investment management firm Finger Interests Number One, in a filing with the US Securities and Exchange Commission on Tuesday night, repeated its demand that the board of Bank of America selects an external candidate as chief executive officer.

Finger Interests once again expressed its strong views that BoA's head of consumer banking Brian Moynihan, and senior strategy officer Greg Curl, are not suitable successors for BoA chief Ken Lewis. Lewis announced on September 30 that he will step down as CEO by year-end. However, Finger Interests this time went one step further and presented a list of candidates for consideration, highlighting that the list was only indicative and not exhaustive.

Candidates proposed by Finger Interests are:

  • Richard Davis, chairman, president and CEO of financial services holding company US Bancorp;
  • William Demcheck, senior vice-chairman of PNC Financial Services, America's fifth-largest bank by deposits;
  • Rich Fairbanks, chairman and CEOof bank holding company Capital One;
  • Gerald Ford, chairman and former CEO of auto insurance firm First Acceptance Corp;
  • Jerry Grundhoffer, director Citicorp;
  • Jim Hance, chairman attelecommunications firm Sprint Nextel, who was CFO of BoA between 1988 and 2004 and also vice-chairman from 1993 until 2004;
  • John Kanas, CEO of private equity-owned BankUnited in Florida;
  • Alfred Kelly, president of American Express;
  • Edward (Ned) Kelly, vice-chairman and head of strategy and M&A at Citicorp;
  • Arkadi Kuhlmann, chairman and president ofING Direct, the ING group's direct banking operation in the US;
  • John Mack, CEO and chairman of Morgan Stanley, who is retiring on January 1;
  • Eugene McQuade, CEO of Citibank's banking division;
  • Al de Molina, CEO ofGMAC Financial Services, the US bank which was earlier the wholly owned financial services arm of General Motors. Molina has previously spent 17 years at BoA, including a stint as chief financial officer;
  • David Nelms, chairman and CEO of credit card issuer and electronic payment services company Discover Financial Services;
  • Michael O'Neill, director Citicorp;
  • Charles Scharf, CEO ofretail financial services at J.P. Morgan;
  • Tony Terciano, chairman Sallie Mae; and
  • Bill Winters, co-CEO of investment banking at J.P. Morgan until earlier this year.

The lengthy filing included a list of pros for each candidate, as well as cons for a few of them. A sense of humour was also in evidence. For example, a note against Davis's suitability was that he may prefer his current job, or in the case of Kuhlmann, his first name was a drawback. Finger Interests' preference for someone with a strong retail banking background was apparent in a comment that Winters is "not seen as a retail banker".

Finger Interests is building further on an October SEC filing in which it outlined a number of concerns with respect to Moynihan and Curl. Finger Interests highlighted last month that the current management team is under investigation by various government agencies for its role in the Merrill Lynch takeover. "The current management team has presided over the misallocation of capital and massive shareholder dilution over the past year," said Finger Interests, going on to term it an underperformer in this recession, specifically in making loans and getting paid back.

Finger Interests owns 1.1 million BoA shares. Earlier this year it suggested, along with various proxy agencies, that shareholders hold the current board responsible for inadequate disclosures related to the Merrill Lynch merger.

On BoA's third-quarter earnings call in mid-October, Lewis told analysts there was "an appropriate sense of urgency" with respect to the announcement of his successor. Lewis declined to answer whether he had a view on if his successor should be an insider or outsider.

¬ Haymarket Media Limited. All rights reserved.
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