With the government pressuring Bank of America Corp. (NYSE:BAC) to replace members of its board, the bank, which has received $45 billion in government aid through Treasury's Troubled Asset Relief Program, has assembled a group of board members to review both the board and plans for CEO succession. One of the directors sitting on the committee is Charles K. Gifford, 66, better known to some (especially in Boston) as Chad.
To those outside of New England, Gifford is chairman emeritus of Bank of America, who briefly presided over the bank holding company after the Charlotte, N.C., bank bought FleetBoston in 2004. Some may also recognize him as a director of CBS Corp. (NYSE:CBS). However, in Boston, Gifford is something of a legend for stabilizing and then modernizing an old Boston institution that stumbled because of bad real estate investments. However, he also is accused of betraying Bostonians when he sold out to Ken Lewis' acquisition machine rather than continuing his own buy and build strategy. Others in San Francisco and Silicon Valley may also recognize him as a villain for acquiring, then shutting down, Robertson Stephens.
However, if Bank of America requires an experienced banker in its hour of need, Gifford may be the guy. Over his 40-year-career, Gifford has seen the industry change from a parochial business locked in by the government's prohibition of interstate banking and Glass-Steagall's firewalls to a regional business and ultimately into the current model of universal banking that's national and international in scope.
He rode those changes starting as a Bank of Boston loan officer in 1967 to the presidency in 1989, when the bank was reeling from bad real estate investments. When his mentor Ira Stephanian retired, he took the CEO job four years later. Shortly after becoming CEO, he bought cross-town peer BayBank in an effort to modernize Bank of Boston, a staid blue blood banking franchise. BayBank was quick to adopt new technologies such as debit cards and ATMs, making its green banners ubiquitous in Massachusetts by the mid-1990s, unlike Bank of Boston locations, which after the merger adopted BayBank's more modern atmosphere and even naming convention with the change to BankBoston.
When Glass-Steagall fell, Gifford jumped into investment banking by buying tech-oriented investment bank Robertson Stephens from Bank of America, which was jettisoning the business as a result of another merger. He later made the hard decision to shutter Robbie Stephens after it was decimated in the dot-com bust.
Still, Gifford never gave up on building the commercial and depository businesses. He garnered national attention in 1999 when he agreed to merge BankBoston with cross-town rival Fleet Financial. The combined bank, FleetBoston Financial, cracked the nation's top 10 commercial banks. Gifford also acquired New Jersey's Summit Bank, which pushed Fleet beyond New England and into the mid-Atlantic region. This drew the attention of Bank of America's Lewis, who lacking a New England presence, acquired FleetBoston for $45 billion in 2004.
Gifford is familiar with integration issues, structural change and dealmaking. He knows how to make hard decisions and take some heat, and at his age he's not seeking power for himself. As a native of Massachusetts, who still lives there, he might also be a counterweight to the large Charlotte-centric interests gathered around Lewis' predecessor, and the man who really built BofA, Hugh McColl. Clearly, the committee will need to make hard choices that will upset some inside the bank. Since he's familiar with playing the villain from time to time, don't be surprised to see Gifford delivering the news when that day comes. - Matthew Wurtzel
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