Management Turnover as Change Agent

Tuesday, June 24, 2008

Suggested Reading - B of A CEO Lewis The Next to Fall?

More and more financial CEOs and CFOs of battered financial firms find themselves the topic of rumors or conjecture. Just today, George Bowser, Jr. wrote a piece for in which he speculated that Kenneth Lewis the CEO of Bank of America BAC (NYSE) might be the next top financial executive to get his walking papers. Bowser bases his speculation on the Lewis' decision to buy and go through with the acquistion of troubled mortgage lender Countrywide Financial CFC. Bowser based his speculation on the recent fall of Kenneth Thompson the CEO of Wachovia who was forced out after his expensive acquisition of mortgage lender, Golden Financial. In his piece Bowser stated,

I believe that if BofA does proceed with the Countrywide merger, Ken’s future at the bank may come to a swift end. BofA will continue to report quarterly losses, just as others in the financial sector. The stock price will suffer and they may have to cut jobs and the dividend rate to conserve capital.
While the Lewis' Countrywide acquisiton may create financial difficulties for Bank of America, I am not convinced Lewis' position is at serious risk. Stay tuned and make sure you keep a close eye on key decisions Lewis and BofA mnakes over the next few months.

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