With the recent announcement that Bank of America Corp. (NYSE:BAC) CEO Ken Lewis is retiring amid messy legal wrangling, the media has begun laying bets on who will replace him. The current odds-on favorite in some precincts of the media is former Citigroup Inc. (NYSE:C) executive Sallie Krawcheck, who assumed oversight of Merrill Lynch & Co.'s thundering herd in August as BofA's wealth management chief. Is she really on the inside track?
The Krawcheck speculation has been fed by a recent appearance on CNBC. In fact, she was the first high-level BofA executive to appear on TV since Lewis made his announcement last week. This has led to some in the media, most notably Tuesday's New York Post, to come to the conclusion this represented her attempt to campaign for the position.
But Krawcheck remains a long shot. Talk of her candidacy is wishful thinking from those who would like to see an outsider lead the bank -- and Krawcheck has never been a real "banker." The likeliest possibility here is that BofA is going to tap someone who both knows the institution and has traditional banking experience in areas like credit, risk management, consumer banking and regulation.
Despite the shuffling of the board a few months back, it still remains a very Charlotte-centric group. Although Krawcheck is a daughter of the South -- she grew up in South Carolina and attended the University of North Carolina -- her background as an equity analyst at Sanford C. Bernstein Co. and CEO of Citigroup's Smith Barney makes her a Wall Streeter by pedigree. She was hired by Lewis only a few months ago, and before that, by Sandy Weill at Citigroup. Neither Lewis nor Weill is exactly a resume booster these days. And after all the mess of the Merrill deal, would the board hand over the bank to essentially a Merrill person?
There appears to be no shortage of candidates that know the bank, know the business and are acceptable to regulators. In fact, there are three strong internal candidates often mentioned as Lewis successors. The recent elevation of former Fleet Financial Group folk on the board certainly gives former Fleet veteran Brian Moynihan a leg up in the race -- plus he wasn't hired by Lewis or his predecessor Hugh McColl, giving him a bit of an outsider image. BofA veteran and CFO Joe Price is often thought of as another leading candidate to replace Lewis. And not all inside candidates are men. Barbara Desoer, who has spent her career climbing the ladder at BofA, may well be on a short list. Unlike Krawcheck, Desoer, who currently oversees mortgage banking, has held executive roles at various banking operations at BofA.
For more on Moynihan, Price, Desoer and the other candidates, see The Deal's slideshow. - Matthew Wurtzel
Also see:
Krawcheck even sounds like Lewis
BofA shareholder Finger points to Lewis' successors
Does BofA want to be a part of it, in New York?
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