"Bank of America needs a new CEO," my Foolish colleague Matt Koppenheffer wrote yesterday. I couldn't agree more, but for now, shareholders will have to settle for a new chairman.
Oh my God, they fired Kenny!
Bank of America (NYSE: BAC ) CEO Ken Lewis was stripped of his chairmanship at the company's annual meeting yesterday. In a close vote, 50.34% of the shareholders voted to split the chairman and CEO roles, installing longtime director Walter Massey as chairman.
What's it mean for B of A? Technically, not much. Massey is now the official babysitter, but Lewis is still president and CEO, and has full control over most day-to-day operations. "[Lewis] is very much in the driver's seat in terms of running the company," a company spokesman said.
Realistically, though, the shakeup isn't quite as straightforward. Perhaps you'll remember former Washington Mutual CEO Kerry Killinger being stripped of his chairman title just three months before he was given the boot altogether. Ditto for former Wachovia CEO Ken Thompson, who lost his chairmanship just one month before being tossed out as CEO. When the boss of a struggling company starts losing support, their managerial death spiral can often quickly follow.
Ken, they're just not that into you
Besides, how many cream pies must be flung in Lewis's direction before he buckles under the pressure? When shareholder meetings are filled with comments like, "Your acquisitions are much akin to the blitzing of Baghdad," you've got to think Lewis has reached a point of no return. No matter how hard you try, you can't effectively lead with that much background noise and distrust from your shareholders. While the CEOs of JPMorgan Chase (NYSE: JPM ) and Goldman Sachs (NYSE: GS ) are busy drafting plans to repay TARP and exploit newfound market opportunities, Lewis is slogging through shareholder lawsuits, damage control, and PR campaigns. That's dangerous.
So what's next for Ken Lewis? I'd be quite surprised if he's around for more than a few more months. Have your own thoughts on the matter? Feel free to share them in the comment section below.
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