Capping a year in which he faced shareholder fury, regulatory scrutiny and was stripped of his chairman’s post, outgoing Bank of America Corp CEO Ken Lewis will get no salary or bonus for this year under an agreement with the government’s pay czar.
Kenneth Feinberg, the US Treasury Department’s special master for compensation who is scrutinizing pay packages at bailed-out banks, suggested that Lewis should get no pay for the year. Lewis agreed, Bank of America spokesman Robert Stickler said on Thursday.
In fact, Lewis will pay back about US$1 million he has received so far out of a US$1.5 million annual salary.
“He will write a check to the company,” Stickler said, adding that Lewis agreed to the proposal because he felt it was not in the bank’s best interest “to get into a dispute with the paymaster.”
The clawback provision does not apply to Lewis’ previously negotiated retirement package, estimated to be worth tens of millions of dollars.
Wall Street has been eagerly awaiting Feinberg’s decisions about pay for 75 of the highest-earning executives at seven firms that got the most taxpayer money. Other companies under Feinberg’s scrutiny include American International Group Inc, General Motors, Chrysler and Chrysler Financial.
Treasury spokesman Andrew Williams declined to comment on Lewis’ compensation, saying only that Feinberg would seek to “strike the right balance” in setting pay for top executives of firms that received significant government help.
Many had expected that Feinberg would seek to curb compensation levels. But now that Feinberg has set a precedent for a clawback in pay, eyes will turn to the fate of other Wall Street CEOs, such as Vikram Pandit, whose Citigroup Inc also has received US$45 billion in bailout aid.
“The government is proving they are serious about taking money back for poor performance,” said Richard Bove, an analyst with Rochdale Securities, in an interview on Thursday evening.
Mark Williams, a finance professor at Boston University and a former Fed examiner, expects that Citigroup and Wells Fargo & Co executives could also see similar requests from Feinberg.
“It would be inconsistent not to,” he said in an interview on Thursday. Williams said that as Wall Street earnings improve, there is going to be more pressure on the executives making decisions about how the money will be spent.
Lewis, 62, hastily announced last month that he will step down as CEO by Dec. 31, ending a tumultuous year in which Bank of America has faced accusations it misled shareholders about its acquisition of the investment bank Merrill Lynch & Co.
Bank of America had no successor in place, leading many to think that his quick exit had surprised the board. It has said a replacement would be chosen before Lewis leaves.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS