BofA chief says no to ’08 bonus
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.
Lewis confirmed the decision in an e-mail sent to top executives Tuesday, the Charlotte Observer reported.
“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. “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 Tuesday 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 wrote.
Bank of America got $25 billion from the government in return for preferred stock as part of the Treasury’s $700-billion plan to boost banks’ capital.
Executives at some other banks also have declined bonuses for 2008, including Citigroup Inc. CEO Vikram Pandit and Goldman Sachs Group Inc. CEO Lloyd Blankfein.
--
