Bank of America Corp. should pick an internal candidate to succeed Chief Executive Kenneth D. Lewis rather than an outsider with limited understanding of the company, former lead director Temple Sloan said.
He favors Brian Moynihan, B of A's consumer banking head, or Barbara Desoer, head of home loans and insurance, because they have excelled at the Charlotte company. Moynihan joined the company through its 2004 purchase of FleetBoston Financial Corp., while Desoer worked for BankAmerica Corp. when it was bought by NationsBank Corp. in 1998.
"I get tired of hearing we didn't have a succession plan," said Sloan, the chairman of General Parts Co. in Raleigh, the owner of the Carquest auto parts brand. "I had the list and we discussed it every month. There has always been a succession plan. You can't run a company the size of Bank of America without a plan."
Sloan was among 10 B of A directors who left the board this year amid criticism over the $29 billion acquisition of Merrill Lynch & Co. Federal officials pressed the company for an overhaul following investor outcry about Lewis' decision to delay disclosing Merrill's mounting fourth-quarter losses and bonus payments until after the transaction was approved by shareholders.
A six-member search committee led by Chairman Walter Massey is considering candidates, with the board possibly making a decision by Nov. 26, spokesman Scott Silvestri said.
The search includes candidates who want to live in New York, acknowledging the bank's biggest units are no longer based in Charlotte, people familiar with the matter said. The leading internal CEO candidates are Chief Risk Officer Gregory Curl, who lives in Charlotte, and Moynihan, according to a person familiar with the matter. Lewis in September named six inside candidates, including Desoer who has led the mortgage unit since the July 2008 purchase of Countrywide Financial Corp.
The Merrill Lynch acquisition is already paying off, though its success remains overshadowed by criticism of Lewis and the board, Sloan said. The purchase has prompted investigations by Congress, the Securities and Exchange Commission and attorneys general in New York, Illinois and North Carolina. "Everyone got crucified over a company that made a billion dollars last quarter," he said.
Lewis announced Sept. 30 his plan to retire at yearend. "I don't think they anticipated Ken Lewis leaving as soon as he left, so I'm not sure Brian Moynihan was fully groomed as his successor," said Jonathan Finger, whose family controls more than 1 million shares of the company.
Candidates contacted by the bank include Robert Kelly, the CEO of Bank of New York Mellon Corp., and Charles Scharf, retail banking head at JPMorgan Chase & Co., according to people familiar with the matter. Kelly is not interested, Bank of New York Mellon spokesman Kevin Heine said last week. A spokesman for Scharf declined to comment.
Sloan said he does not know whom B of A's board will select and he has not talked with new board members. "I didn't think it was appropriate," he said.
The Laborers International Union of North America filed a shareholders' proposal in 2008 asking B of A to provide more information about CEO succession. It was never put to a vote, according to the union.
If the company had a succession plan, "it was never disclosed to any degree," said Richard Metcalf, director of the union, which owns bank shares through its pension funds.