CHARLOTTE -- Bank of America Chief Executive Ken Lewis has gotten a vote of confidence from his board.
After a quarterly meeting at the company's headquarters in Charlotte on Wednesday, the board's lead director, Temple Sloan Jr., said, "The board today during the regular meeting expressed support for Ken Lewis and the management team, noting their experience in managing through challenging environments and in assimilating mergers." Sloan's statement was issued through bank spokesman Robert Stickler.
The statement was intended to answer critics of Bank of America's acquisition of Merrill Lynch, a deal that burdened the bank with billions of dollars in unexpected losses and that led Lewis to ask the government for additional bailout money.
While Lewis' job does appear to be safe, "he does have his work cut out for him," said Tony Plath, finance professor at the University of North Carolina at Charlotte.
Lewis separately on Wednesday announced plans to release quarterly reports on lending activities, and provide greater transparency about its activities. The initiative was presented to the board, the company said.
The announcement was a step toward answering growing questions about what banks in general are doing with bailout money that they have received from the government. A number of lawmakers are concerned that banks are not lending enough; the bailout program was creating to help unfreeze credit markets and get lending back to more normal levels.
"This is a step in the right direction in creating greater transparency of where taxpayer dollars are going," Plath said. "Now he needs to speak up about what happened with those bonuses."
Last week, it was learned that Merrill Lynch, with Bank of America's knowledge, had moved up yearend bonuses for executives so they could be awarded before the acquisition was formalized Jan. 1. The bonuses were given as Bank of America was approaching the government for more money.
Former Merrill Lynch CEO John Thain, who had taken over as head of the combined company's wealth management business, resigned last week after news of the bonuses broke.
Thain and Bank of America's chief administrative officer, J. Steele Alphin, have been subpoenaed by New York Attorney General Andrew Cuomo amid an investigation into the timing of the Merrill Lynch bonuses.
The Financial Times also reported Wednesday that Bank of America would defer 2008 bonuses for its capital markets and investment banking staff. Employees that were to receive bonuses of more than $50,000 will not get a year-end bonus for 2008. Instead, those employees will receive the deferred payments in one-third increments in 2010, 2011 and 2012, according to the Financial Times report that cited unnamed executives familiar with the situation.
Additionally, Bank of America on Wednesday added three former Merrill Lynch directors to its board of directors. It is common for a firm to add board members from a recently acquired company.
Charles Rossotti, Virgis Colbert and Joseph Prueher were added to the board of directors for the Charlotte-based bank.
Rossotti, 67, is a senior adviser at the Carlyle Group and had served on Merrill Lynch's board since 2004. Colbert, 69, is a former executive vice president of Miller Brewing Co. who had served on Merrill Lynch's board since 2006.
Prueher, 66, is a consulting professor at Stanford University and senior adviser on the Preventive Defense Project. Prueher, who joined Merrill Lynch's board in 2001, was also an ambassador to China.
Shares of Bank of America rose 89 cents, or 13.7 percent, to $7.39. News of the vote of confidence came after the close of trading.