BofA Ken Lewis loses chairman role

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Published April 29, 2009 at 6:07 PM

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The results are in! Ken Lewis' role as CEO and chair of Bank of America Corp. (NYSE:BAC) has been split. Shareholders voted to separate his roles at an annual shareholder meeting Wednesday. Lewis will continue as CEO and president, and Walter E. Massey will take the role as chairman.

BofA shareholder Jonathan Finger of Finger Interests Number One Ltd. told Dealscape, "While we are happy that shareholders voted to separate the chairman and CEO positions, we are disappointed that the board apparently did not consider looking outside the current directors for a truly independent chairman. We are hopeful that Mr. Massey will exert true independence in acting as chairman. There are significant legal and other issues facing the company that will require strong leadership."

A spokesperson from BofA shareholder RiskMetrics Group told Dealscape, "With the financial crisis as a backdrop, shareholders are calling for more accountability and independence in the boardroom. As evidenced by the Bank of America vote today, they are clearly more willing to support binding independent chair resolutions."- Maria Woehr

For more see the press release below:

CHARLOTTE April 29 /PRNewswire/ -- Bank of America Corporation today announced the results of management and shareholder proposals at the company's 2009 annual meeting.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b)

All 18 directors were elected to the board by comfortable margins. In addition, management proposals regarding executive compensation and the retention of PricewaterhouseCoopers LLC as the company's independent accounting firm were approved.

Seven shareholder proposals were not approved. An eighth shareholder proposal to change the company's by-laws to require an independent chairman was narrowly approved. (For results see the table below).

At a meeting of the Board of Directors today, after a recommendation from the Governance Committee, Dr. Walter E. Massey was elected chairman. Kenneth D. Lewis will be president and chief executive officer. The board unanimously expressed its support for Lewis to continue in that role.

Massey is president emeritus at Morehouse College in Atlanta. He served as president of Morehouse from August 1995 to June 2007. He has been a director of the board since 1998 and is a member of the board's Audit Committee. He was a director of BankAmerica Corporation from 1993 to 1998 and currently also serves as a director of McDonald's Corporation. Massey formerly was also a director of Delta Airlines, Motorola, BP PLC.

Prior to Morehouse, Massey held a range of administrative and academic positions. He is former director of the National Science Foundation, a position to which he was appointed by former President George H.W. Bush. The Foundation is the government's lead agency for support of research and education in mathematics, science and engineering. Massey also served as vice president for research and professor of physics at the University of Chicago, as director of the Argonne National Laboratory, dean of the College and professor of physics at Brown University and as assistant professor of physics at the University of Illinois.

Immediately prior to Morehouse, Massey was provost and senior vice president for academic affairs at the University of California. In this position, the second most senior position in the UC system, he was responsible for academic and research planning and policy, budget planning and allocations, and programmatic oversight of the three national laboratories the University manages for the Department of Energy: Lawrence Livermore National Laboratory, Los Alamos National Laboratory and Lawrence Berkeley Laboratory.

After earning a bachelor of science in physics and mathematics in 1958 from Morehouse, Massey received his master's and doctorate in physics in 1966 from Washington University in St. Louis, Mo. Massey's research has involved the study of quantum liquids and solids. His written work has also addressed science and math education, the role of science in a democratic society, and university-industry interactions and technology transfer in national and international settings.

Active with a range of organizations, Massey is a past chair of the Secretary of Energy Advisory Board (SEAB) and was a member of the President's Council of Advisors on Science and Technology. The recipient of more than 30 honorary degrees from institutions such as Yale University, Northwestern University, Amherst and the Ohio State University, Massey's leadership in education includes his service as a member of the Gates Millennium Scholars Advisory Council and the National Commission on Mathematics and Science Teaching for the 21st Century.

He is a fellow and past president of the American Association for the Advancement of Science, a fellow and past vice president of the American Physical Society, and a member of the American Academy of Arts and Sciences, the American Philosophical Society and the Council on Foreign Relations.

Born in Hattiesburg, Miss., he and his wife, Shirley Anne, have two sons and three grandchildren.

During the meeting, Lewis said the company's long-term vision for profitable growth is being advanced by the acquisitions of Merrill Lynch & Co. and Countrywide Financial Corp. despite the challenging economic environment.

"We are building this company and managing for the long term," Lewis told shareholders at the company's annual meeting today. "I continue to believe we have built the best financial company in the industry, and that our results over the long term will bear that out.

"Let me acknowledge that 2008 was a very difficult year for the economy, for the financial services industry and for our company in particular," Lewis said. "Our company's shareholders have carried a heavy burden recently. We are doing everything within our power every day to fight through today's adversity and drive toward tomorrow's promise.

"Merrill will help the company move toward its goal of developing stronger, deeper and more profitable customer relationships over the long term through its leading positions in capital markets and wealth management," Lewis said. "Countrywide helped Bank of America gain a high-quality franchise and customer base along with significant market share in mortgages - a cornerstone financial product," he added.

"My strong feeling is that organizational integration - and a renewed focus on organic growth - will be the almost exclusive focus of our efforts in the coming years," Lewis said.

Bank of America Chief Financial Officer Joe Price told shareholders the company's core strengths in its business become more evident in challenging economic times.

"Our broad customer and client reach and geographic diversity form a powerful engine for revenue generation and earnings," Price said. "Our business diversity is equally important, providing balance as some businesses perform well while others are confronted with challenges."

With the earnings power added from recent acquisitions including Countrywide, Merrill, LaSalle Bank and MBNA, along with the cost savings opportunities, Price said although he can't predict future results, he believes the company has the potential to produce approximately $30 billion in annual net income under more normal economic conditions.

"As demonstrated by our history of revenue and earnings, and despite today's challenges, the model we have built is working, and we expect it to be even more powerful in the future," Price said.

    Items of Business Voting Final Results

                    Directors                  % For        % Against

    William Barnet, III                         93.19           6.81
    Frank P. Bramble, Sr.                       78.32          21.68
    Virgis W. Colbert                           85.64          14.36
    John T. Collins                             93.32           6.68
    Gary L. Countryman                          87.33          12.67
    Tommy R. Franks                             93.43           6.57
    Charles K Gifford                           92.58           7.42
    Kenneth D. Lewis                            67.33          32.67
    Monica C. Lorenzo                           75.34          24.66
    Walter E. Massey                            92.72           7.28
    Thomas J. May                               93.32           6.68
    Patricia E. Mitchell                        87.92          12.08
    Joseph W. Prueher                           85.69          14.31
    Charles O. Rossotti                         86.37          13.63
    Thomas M. Ryan                              84.06          15.94
    O. Temple Sloan                             62.60          37.40
    Robert L. Tillman                           75.66          24.34
    Jackie M. Ward                              71.79          28.21

               Management Proposals            % For        % Against

    Ratification of Accounting Firm             96.70           3.30
    Executive Compensation (non-binding)        71.28          28.72

              Shareholder Proposals            % For        % Against

    Government Employment Disclosure             7.81          92.19
    Executive Compensation Advisory Vote        40.08          59.92
    Cumulative Voting                           37.78          62.22
    Special Stockholder Meetings                49.35          50.65
    Independent Board Chairman                  50.34          49.66
    Credit Card Practices                       33.38          66.62
    Healthcare Reform Principles                 7.52          92.48
    Limits on Executive Compensation            26.77          73.23

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 55 million consumer and small business relationships with more than 6,100 retail banking offices, more than 18,500 ATMs and award-winning online banking with nearly 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

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