Wednesday, July 07, 2010
Mediocrity At The Top: BofA's Brian Moynihan
Yesterday's Wall Street Journal's Money & Investing section carried a feature article discussing how BofA's CEO Brian Moynihan got his current job.
The details should bring shame and humiliation to everyone involved, but most especially the board.
That Moynihan should have joined the ranks of overpaid, mediocre large US bank CEOs is not, by itself, all that surprising. At least not to me. None of the CEOs of the few remaining large, authentic commercial banks are at all noteworthy for their outstanding skills or accomplishments. Moynihan is no exception to that.
But the details of Moynihan's career left me shaking my head. The guy literally hopscotched luckily from a general counsel job at Fleet through various unremarkable stints in business units at BofA. Soon after the Merrill acquisition, he refused a transfer to a credit card unit, and was told he was finished.
Little more than a year later, he was named CEO to replace Ken Lewis, the guy who promised to sack him for refusing the earlier job offer.
If this story, just by itself, doesn't tell you why there is so much ineptitude and mediocrity among US commercial banks, nothing else will.
But wait, as they say in the infomercials....there's more!
One BofA board member held out against Moynihan, encouraging fellow board members to seek an outside replacement. Nothing doing. The rest of the incompetent firm's board railroaded the improbably named William Boardman by forcing a vote on a unanimous decision. Boardman was reported as believing that his dissent on Moynihan's election would hurt the bank, so he caved.
He must be so proud.
Moynihan, too, I suppose.
Together, Lewis, Moynihan and BofA's board all contributed to the naming as CEO a rather unaccomplished, generic businessman with no outstanding instance of ingenuity, creativity or other quality involving unusual excellence.
Instead, Moynihan is a return to banking's Organization Man era. Very much according to this post, which I wrote upon Moynihan's being named CEO at BofA last December.
It took a while, but the Journal's piece yesterday, which filled in the blanks on Moynihan's career and the BofA board's actions, have pretty much validated my initial sentiments.
The nearby five-year price chart for the S&P500 Index, BofA and its major large US commercial bank competitors does, as well. BofA is still the worse than all but Citigroup.
Way to go, Ken and Brian...and your board.