Saturday, October 17, 2009

The BofA Ken Lewis Succession Mess

By now, BofA's board must be lamenting the day its CEO, Ken Lewis, agreed to take federal funding. And agreed to buy Countrywide Financial. And agreed to buy Merrill Lynch. And agreed not to tell shareholders of the bonus payouts to Merrill employees prior to the sale's closing.

Now the administration's "pay czar" is refusing to agree to Lewis' compensation.

Isn't this all enough to prove why it's never a good thing for government to get in bed with private, publicly-held companies?

BofA probably should have just taken its lumps from the Countrywide purchase and soldiered on, rejecting federal "help."

It could have done what it liked with the Merrill purchase, including rescinding it for material changes. It could have paid its employees what it liked, and ignored Treasury's coercive behaviors.

Instead, the board has to scramble to replace its CEO, who is girding for an extended legal battle with the New York State. And has to submit its executive compensation to some nitwit in Washington.

Federal money was the root of all of this trouble for BofA.

They should have just said "no."

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