CtW Investment Group calls on BofA to remove Lewis
CtW Investment Group has called on Bank of America’s board to remove Kenneth Lewis as chairman and chief executive in light of his disastrous missteps, according to a letter to Bank of America lead director O. Temple Sloan on Thursday.
The Washington, D.C.-based union group said in its letter that if the board refuses to remove Lewis, the group will ask shareholders to vote against the re-election of Lewis and other executives at BofA’s (BAC) annual meeting next month.
According to CtW, since the September announcement of the merger with Merrill Lynch, BAC has:
•Suffered a 90 percent drop in share price;
•Allowed Merrill to pay out $3.6 billion in bonuses, even as the firm was hemorrhaging money;
•Denied any active role in determining the size of Merrill bonuses, a claim subsequently contradicted by documents that have emerged in the NY Attorney General’s investigation;
•Failed to timely disclose over $20 billion in pre-tax losses at Merrill;
•Failed to invoke the Material Adverse Effects clause of the merger agreement to protect BAC shareholders from these losses.
Change to Win is a 6-million member partnership of seven unions founded in 2005 instant credit report.
Removing Lewis is now a necessary prerequisite to restoring BofA’s credibility with shareholders, regulators and the public, the letter states. If the board refuses to remove Lewis, CtW will call on shareholders to vote against the re-election of Lewis, Sloan, and Thomas Ryan, corporate governance committee chairman.
Charlotte-based BofA bought Merrill Lynch on Jan. 1 for $29.1 billion, including $8.6 billion in preferred stock New Year’s Day 2009.
Last month, BofA reported a net loss of $2.39 billion, or 48 cents per diluted share. The news came the same day the bank said it would slash its dividend to one cent per share from 32 cents and accept an additional $20 billion in government bailout money as part of its acquisition of Merrill Lynch. BofA had previously received $25 billion under the Troubled Asset Relief Program, which is designed to unfreeze the credit markets.
BofA earned $215 million, or 5 cents per diluted share, in the fourth quarter of 2007.
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