It's finally here: Anger against him has been brewing for months, and today, Bank of America CEO Ken Lewis is facing down upwards of 2,000 angry shareholders at the annual meeting in Charlotte. Not much seems to have gone down yet, but tension is in the air and the prognosis for last year's Banker of the Year is negative. For those just tuning in, here are the reasons he is expected to soon be fired.
• His decision to spontaneously acquire ailing firm Merrill Lynch, for which he paid a 70 percent premium.
• Failing to notice that Merrill was a ticking time bomb, one that soon exploded, losing $15 billion, forcing Bank of America to take a $20 billion capital injection from the Treasury (on top of the $25 billion they already had) and to seek a government guarantee on around $120 billion of troubled assets.
• Deciding to then pay $36 billion in bonuses to Merrill employees anyway.
• Obfuscating when asked to answer questions about said bonuses by the New York attorney general.
• Blaming everything on Merrill CEO John Thain.
• Blaming the decision to acquire stupid Merrill in the first place on the federal government, which he says bullied him and threatened his job (which they deny), which is actually not a good reason to screw over your shareholders.
Yesterday, protesters did their thing at the Bank of America buildings in New York and Washington, today, a truck emblazoned with the words FIRE KEN LEWIS on it is driving ominously around HQ, and a group called Take Back The Economy has made a compelling video, entitled, Fire Ken Lewis. We have to admire them all for going so all out. It is a recession, after all.
UPDATE: Ken Lewis has been half-fired. According to Bloomberg: "Shareholders voted to split the duties of Chairman and Chief Executive Officer Kenneth Lewis after investors criticized management’s handling of the Merrill Lynch & Co. takeover. Walter E. Massey was named the new chairman, while Lewis will be president and CEO, according to a statement, which expressed “unanimous support” for Lewis to continue." It's not clear he will, though: "The vote may cast doubt on how long Lewis, 62, will remain at the bank he’s led since 2001."