George S. May Business Blog

CtW Investments not too fond of BoA CEO Ken Lewis

CtW Investment Group has publicly demanded, in a letter from their lead director O. Temple Sloan, that Bank of America remove chairman and CEO Kenneth Lewis (left).

CtW Investment group, based in Washington, D.C., added in the letter, that, should the Bank of America board refuses to remove Lewis, the group will initiate a push on their shareholders not only to vote against the re-election of Lewis, but other executives as well, at Bank of America’s annual meeting next month.

CtW Investment Group went on to point out that since the September announcement of the merger with Merrill Lynch, Bank of America has:

• - Suffered a 90 percent drop in share price;
• - Allowed Merrill to pay out $3.6 billion in bonuses, even as the firm was hemorrhaging money;

- Denied any active role in determining the size of Merrill bonuses, a claim subsequently contradicted by documents that have emerged in the NY Attorney General’s investigation;

- Failed to timely disclose over $20 billion in pre-tax losses at Merrill;

- Failed to invoke the Material Adverse Effects clause of the merger agreement to protect BAC shareholders from these losses.

The letter insists that, in order to restore Bank of America’s credibility among shareholders, regulators and the public, removing Kenneth Lewis is a necessary prerequisite.

Well, in looking at the above figures, combined with the unmentioned fact that Bank of America lost $2.39 BILLION last month alone, it is pretty hard for me to make a case against CtW Investments’ call-to-action. Now, what kind of pull does CtW investments have over their shareholders and, more importantly, what kind of pull does CtW Investments and their shareholders have over Bank of America? That I don’t know. All I can say is: Good luck Mr. Lewis, you may need it.

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