So Ken Lewis finally succumbed to the inevitable and announced his resignation as CEO of Bank of America yesterday. Hot on the heels of a succession scuttlebutt over at rival JPMorgan Chase, the board of Bank of America now has to make a decision fast about Lewis’ successor. Who are they considering?
Here’s how the horse race breaks down:
Title: President, Global Markets
What he actually does: Montag oversees pretty much anything the firm does with debt and equity securities — selling, buying, or researching them for clients; trading them for the firm’s own account; or issuing them on behalf of companies (i.e., investment banking).
Heritage: Montag was only at Merrill Lynch for a few months before Bank of America bought it in 2008. Before that, he spent 22 years at Goldman Sachs, eventually becoming co-head of the firm’s global securities business.
Reading the tea leaves: After missing out on the top job at Merrill to Brian Moynihan when John Thain was ousted in January 2009, Montag gained back ground in August when BofA CEO Ken Lewis moved Moynihan out of global markets to head up the company’s consumer banking group. The only hitch: Montag had to split Moynihan’s old job with new hire Sallie Krawcheck, who oversees wealth management.
What he’s got that his old boss didn’t have: Friends on Wall Street. No one liked Ken Lewis anyway.
Shroud of mystery: Montag was a heavy-hitter at Goldman for more than two decades — until he wasn’t. Once a front-runner to be one of the firm’s co-presidents under Lloyd Blankfein, his departure from the firm in December 2007 came as a total surprise.
Friend he probably doesn’t mention that often: Montag was hired at Merrill in June 2008 by his longtime Goldman colleague John Thain. Thain hooked him up with a $40 million paycheck for just his first year’s work.
Title: President, Consumer & Small Business Banking
What he actually does: Just what it sounds like: Moynihan oversees all the stuff you (or your employer) do with your bank: deposits, credit cards, and lending.
Heritage: Moynihan joined Bank of America in 2004 when the bank merged with FleetBoston Financial.
Reading the tea leaves: Technically a Wall Street outsider — he still lives in Boston, where he’s been for years — Moynihan has nevertheless infiltrated the upper reaches of one of the last banks still standing, even outflanking Montag to take over Merrill Lynch when John Thain was ousted in January 2009. The arrival of Sallie Krawcheck in August caused a reshuffling at the top, though, and Montag may now have the upper hand.
What he’s got that his old boss didn’t have: Not a whole lot. Moynihan’s detractors say he’s nothing more than a yes-man for Ken Lewis. That may or may not serve him well, depending on how much the board is prepared to listen to Lewis in its deliberations.
Scuttlebutt Moynihan is reportedly the one executive from Bank of America that Ken Lewis took with him to a spring meeting at the White House. “He has excelled at everything we have asked him to do,” said Lewis.
THE LONG SHOT
NicknameThe Queen of Clean, a reference to her reputation as an honest analyst, which is apparently a rarity on Wall Street.
Title: President, Global Wealth & Investment Management
What she actually does: Oversees the $2 trillion in assets that the firm invests on behalf of individuals and institutions, including its 20,000 financial advisers.
Heritage: Once the CEO of respected independent research firm Sanford Bernstein, Krawcheck worked at Citigroup from 2002 to 2008 before being ousted by Citi chief Vikram Pandit. After an eleven-month vacation, Bank of America CEO Ken Lewis hired her in August. Of the three highest-profile Wall Street females to lose their jobs during the credit crunch — including Morgan Stanley’s Zoe Cruz, and Lehman Brothers’ Erin Callan — Krawcheck is the first to bounce back with a new job.
Classy move:Shortly after being appointed to her new gig, Krawcheck reached out to a handful of Merrill Lynch veterans — former CEOs David Komansky and Daniel Tully, as well as former retail brokerage head John Steffens — to show the restless brokerage force that she valued its heritage.
Reading the tea leaves: Reporters with a taste for a gift-wrapped story line have suggested that Krawcheck is actually a contender for the top job at Bank of America, but those in the know say her performance at Citigroup — Krawcheck was chief financial officer when it overloaded its balance sheet with dubious mortgage product — will prove too large an albatross when the time comes.
What she’s got that her old boss didn’t have: A following in the financial media that’s practically impervious to her shortcomings.
Money where her mouth is: Krawcheck purchased more than $1 million in Bank of America stock as a sign of her commitment.
BOTTOM LINE: We’d bet on Montag and his Goldman pedigree. Moynihan is too close to the discredited Lewis. And Krawcheck, despite her media-friendly story, doesn’t have the track record to inspire enough confidence for this huge job.