No executive bonuses for 2008, Bank of America CEO says
Maybe bankers are beginning to understand something about public rage over the bailout, after all.
Bank of America Corp. Chief Executive Ken Lewis is asking the company’s board not to award bonuses to him or other top executives for 2008, the Charlotte Observer reported today:
Lewis confirmed the decision in an e-mail sent to his eight direct reports this afternoon. A Bank of America spokesman confirmed the authenticity of the e-mail obtained by the Observer.
"This was a difficult decision because we have worked hard and made progress on many projects that will create value for our company in future years," Lewis said in the e-mail, citing acquisitions of Countrywide Financial and Merrill Lynch as well as a successful LaSalle Bank integration. "Nonetheless, we are a pay-for-performance company."
Bank of America’s stock plummeted 66% last year, after a 22% decline in 2007. With loan losses mounting, the company in October slashed its dividend payout 50%, a blow to many shareholders who have relied on the stock for income. The shares closed today at $14.28, up 30 cents.
"It is only fair that our most senior executives, who have been rewarded in past years when our company and stock price performed, should now share in the pain as performance has lagged," Lewis said in the e-mail.
Bank of America got a total of $25 billion from the government as part of the Treasury’s $700-billion plan to bolster banks’ capital with the aim of encouraging more lending. The investment is in the form of preferred stock that the government expects will be repaid in time.
Executives at some other banks also have declined bonuses for 2008, including Citigroup CEO Vikram Pandit and Chairman Win Bischoff, and Goldman Sachs Group CEO Lloyd Blankfein.
But in another case that got a lot of unwanted publicity, a former Merrill Lynch executive left the firm last month with a $25-million golden parachute after Bank of America completed its purchase of the brokerage.
The executive, Peter Kraus, had been with Merrill only three months before the Bank of America deal triggered his payout. Kraus made news last week when he plunked down $37 million for a Park Avenue apartment.
-- Tom Petruno
Photo: BofA CEO Ken Lewis (credit: Paul Sancya/Associated Press)
Kudos to Mr Lewis. Although we would wonder what bonus' should be based on. Obviously performance. Since all numbers are down-no matter why-he is declining what he doesn't deserve. Considering what is going on in business today I would support-and do- this mans business all the time.
What I would like to know is which business's are paying dividends to executives in a down year. I assume the auto industry is one. They know no other way. I would boycott those business'. How about chrysler how do private owners handle themselves? I don't beleive I could ever buy another chrysler or dodge product.
Posted by: Neil Golden | January 06, 2009 at 05:27 PM
Are you joking?
K LEWIS had a totsl compensation of
2007 16.4 millions
2006 25.6 millions
2005 22 millions
2004 22.7 millions
am\nd you want us to cry and aplogize to theses crooks?
Thye just removed the word bonus an d more of the stock awards, options etc.. without the private clubs, golf, chauffeur etc.
Posted by: Guy | February 12, 2009 at 08:46 AM
PNC execs ARE taking a big bonus after receiving TARP money. Everyone should withdraw their money from PNC until the bonuses are recinded
Posted by: alan erickson | February 14, 2009 at 05:46 AM