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Bank of America (BAC) is in the midst of a frantic search for a CEO to succeed Ken Lewis, who is stepping down before the end of the year.
In an article on Bank of America's murky succession plan, USA Today buries this newsworthy factoid seven paragraphs down. From the "You can't make this stuff up" department:
BofA Chairman Walter Massey, who is leading the search, is currently on vacation on a ship and will not be reachable until Nov. 23, according to Morehouse College, where Massey is president emeritus.
Not long ago, the American taxpayer was told that bailing out Bank of America was an absolute necessity because the institution was such a systemically significant part of the economy. So here's my question for Bank of America, the Treasury Department, and the company's board of directors: Do you think that maybe, just maybe, if Bank of America's future was important enough to justify $45 billion in TARP money, that perhaps, just perhaps, its future is important enough that its chairman of the board can delay his "vacation on a ship" while he tries to find a new CEO?
This is just another example from a long tradition of bad corporate governance in America: The chairman of the board hops on a cruise ship for two weeks where he is unreachable while his company tries to find an new CEO to navigate it through a financial crisis where billions in taxpayer dollars are on the line.
According to his biography listed in the company's proxy statement filed with the SEC: WALTER E. MASSEY (70), President Emeritus, Morehouse College, Atlanta, Georgia. He served as President of Morehouse College from August 1995 to June 2007. He has been a director of the Corporation since 1998 and is a member of the Audit Committee. He also serves as a director of McDonald's Corporation.
Massey's apparent lack of dedication to dealing with the succession situation may stem from his close ties to Ken Lewis. Back in June, The Wall Street Journal (subscription required) reported that Mr. Massey has "long, close ties to Mr. Lewis, who was co-chairman of a Morehouse College capital campaign when Mr. Massey was president of the historically black men's college. ... Some activist investors contend Mr. Massey isn't independent enough."
The other question here is what Bank of America's spokesperson thought could possibly be gained from telling a reporter about Mr. Massey's travel plans at sea. A simple "not available to comment" might have been golden here.
Perhaps while Mr. Massey is on vacation, Bank of America should start looking for a new chairman of the board as well as a new CEO.
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Reader Comments (Page 1 of 1)
11-12-2009 @ 1:44PM
George Romero said...
Mr Massey was voted in office by shareholders the same ones who voted Mr. Lewis out of that position a few months ago.... the man deserves time off at his age? Instead of fueling the fire try reporting the positive things in the business. BOA is a great company sure some of the leaders got greedy and over extended the company resources and I do hope those criminals involve get their due rewards perhaps a cell next Bernie....
11-12-2009 @ 1:08PM
claruebail said...
Amen, brother.
11-12-2009 @ 1:38PM
Elizabeth Harrow said...
I'll second the "amen" on this one -- I nearly did a spit take reading the USA Today article. Maybe Massey is sailing the high seas in hopes of discovering a previously unknown cache of CEO talent?
11-12-2009 @ 3:36PM
Raymond R. Murray said...
If Mr Massey is so old to need a vacation then perhaps he is too old to be a board member which requires he be up to the task, and being on vacation at this time is not part of the task. Get rid of the Lewis hold out as his time is long gone and his ineptness has led BOA to its financial problems today. No company is too big to fail, and BOA should have been put out of its corporate misery many months ago. "To big to fail" is a catch word used by the corporations to brainwash the public while taking their tax money to furthur their failing ways.
11-12-2009 @ 4:17PM
Robert said...
Let's throw another log on the fire of public outrage.
Do you actually think that the Chairman of the Board is personally doing the search or that he has people or a committee doing that?
There is no doubt BAC made some mistakes, the biggest was getting involved with the US Govt to begin with. The 2nd would be not standing up to the Fed and Treasury(Bernake and Paulson) and going through with the Merril deal although in hindsight it seems the Fed is bailing out all banks with their low interest rates allowing the banks to borrow and invest at near zero interst, so maybe Merrill was another Ken Lewis success since it has been the biggest earner of all units for BAC.
As the husband of a BAC retiree, I can tell you that Ken Lewis was a great CEO who made a bad decision, getting in bed with the Govt. Yes we lost money on our bac stock but it never would have reached it's previous highs without Lewis and his predecessor Hugh McCall. America has lost another great CEO as if they grew on trees.
For all you who hate business and capitalism and blame every CEO for the problems of the country, you just keeping believing in your Govt leaders at 10.2% unemployment and over 14 trillion in debt and more plans for higher taxes and entitlement programs their making all the incompetent CEO's look like geniuses.
AWWW Change you can believe in, isn't it great
11-12-2009 @ 5:28PM
Allen said...
Bank of America has the same problem as AIG, Goldman Sachs, Merrill Lynch (oh, yeah - they are part of BofA!), GM etc. - a leadership vacuum at the top. B of A's problem was Kenny Lewis, a classic boob if ever there was one, totally self-centered and greedy. AIG had a string of incompetent CEOs, including one who was essentially illiterate and a high-school drop-out (really!), while Merrill and Goldman had cultures that rewarded failure with generous bonuses. GM had a totally incompetent CEO, an entrenched corporate culture of the consumer be damned and a product line devoid of any product. They should all have been allowed to fail and the bailout should have gone to small business, the backbone of America.
11-12-2009 @ 5:32PM
L.A. said...
B of A should MOST DEFINITELY be looking for a new Chairman of the Board as well as a new CEO. It's insane that those fat cats tooling around on their luxury mega yachts are handed millions of dollars in pay each year, though it takes OUR hard-earned tax dollars to bail out the messes they create/fail to manage. Why not make their compensations results-based? You know... like in the REAL world.