Even as Bank of America's latest executive shuffle raised more questions about an already puzzling company, one thing did become clear: the hiring of former Citigroup Inc. executive Sallie Krawcheck and the abrupt departure of veteran Liam McGee has kicked off a five-candidate race to succeed president and chief executive Kenneth D. Lewis.
Brian Moynihan, who is replacing McGee as the head of consumer banking, is viewed by outsiders as the favorite to replace Lewis, due to the wide range of posts he has held since joining the company via its 2004 purchase of FleetBoston Financial Corp.
A source close to the company, meanwhile, said Krawcheck, who takes over Moynihan's oversight of global wealth and investment management, will be considered, as will Thomas Montag, who will oversee corporate and investment banking. The other contenders are chief financial officer Joe Price, and Barbara Desoer, who runs insurance and mortgage banking.
Outsiders viewed the moves as an effort by the $2.3 trillion-asset Charlotte company's board to move the company beyond the tumultuous period that followed its Jan. 1 purchase of Merrill Lynch & Co. The changes are not without risk and may leave investors wondering in the short term where the company is headed strategically.
"They're trying to put the past behind them," said Nancy Bush of NAB Research LLC. "This is a transition to a new and improved Bank of America but we don't really know what that means yet."
Bush said she has two reservations. She said Moynihan has never managed a retail bank, leaving her to wonder what changes he might make. Secondly, she noted that Krawcheck had long been associated with Citi and its Smith Barney unit, which could create friction between her and the brokerage ranks at the former Merrill.
Krawcheck, whose hiring B of A announced Monday, stepped down late last year as the head of Citigroup Inc.'s wealth management unit. While at Citi, she had stints running Smith Barney and serving as Citi's chief financial officer.
Lewis has repeatedly expressed a desire to remain at the helm for at least two years to shepherd the company through recovery. Some analysts are becoming convinced that Lewis' departure is drawing near and a few, who asked not to be named, said it could be as soon as year-end.
Robert Stickler, a Bank of America spokesman, said the shake-up in the corporate suite followed a review of management led by Lewis and the board. "We're looking forward to post-recession and our opportunity there," Sticker added. Though scant on details, he said Moynihan may look at ways to "reengineer" businesses such as credit cards and deposit gathering. Moynihan has never run a consumer operation, but "he is great at looking at businesses and finding out what makes them tick."
Stickler said none of the executives were available for comment.
A source close to the company said McGee, once viewed as vying for Lewis' job, decided to leave after realizing he would have a better chance of running a company by leaving Bank of America.
B of A has gone through four chief financial officers in the last five years. The company this year named a new general counsel and chief risk officer. It also moved Moynihan and Neil Cotty to new posts only to return them to their previous jobs a few months later.
In another sign Bank of America wants to quickly put the past behind it, the company agreed on Monday to pay $33 million to settle charges that it made false and misleading statements to investors about bonuses at Merrill.
The Securities and Exchange Commission said that it had charged the company for claiming in proxy materials that Merrill had agreed not to pay performance bonuses before the deal was completed. The SEC claimed that B of A had "already contractually authorized" Merrill to pay up to $5.8 billion in discretionary bonuses. Merrill eventually paid $3.6 billion in bonuses.