BofA and Ken Lewis

October 6, 2009

The Facts

As reported earlier, Ken Lewis, CEO of Bank of America, is retiring at the end of this year. What wasn’t reported at that time was that he will walk away with a 53 million dollar pension plan. As such, he will enjoy a retirement income of $3.5 million per year. In addition to that he has $10 million coming in deferred compensations and $8 million in restricted stock and stock options.

Ken Lewis

Lewis took control of the company eight years ago when the company stock was about $25 per share. The stock rose to nearly $55 in 07 and 08 before it fell to around $4 per share at the beginning of this year. And that held only because the US taxpayers stepped in, via our fabulous elected officials, with $45 billion, which has pushed the stock back to around $18. According to this article, “Lewis is set for a cushy retirement despite the plunge in the bank’s stock”.

He has received $63 million in pay and perks over the past three years in addition to his annual salary of $1.5 million. All told, Lewis’ total income since 2003 has been $123 million.

In Jennifer Millman’s article on this issue she closes with “and to all you BofA shareholders out there who are wondering how the heck you’re going to retire, considering how pitifully the stock performed for you, and want to know where your multi-million-dollar pension package is, Ken Lewis’ address is …” [bold added].

My View

Millman’s point actually says it all, so I’m really wondering why I’m even trying to say anything. Lewis may have something coming as an employee of the company for some 38 years, but those tens of million over the past eight year and what he’s going to get? Not hardly!! He was the man that sat behind the desk of “the buck stops here” during the ‘fake’ rise and real fall of the company. So why is he being so richly rewarded? And to say his worth would have been millions more had the company not fallen is hallow words — he will feel no suffering at all on what he’s getting. It’s like saying he has only enough money to last another 100 years instead of enough money to last another 300 years. How long can the bamboozled stockholder live on what they have left? Most likely, none! There dividends were cut to one penny every three months.

Of course, my point always has been, and is now, that Lewis wouldn’t be collecting a single penny if not for us taxpayers. Had he had to depend on his company’s performance under his leadership, there’d be no company to pay him those tens of millions. As taxpayers, we won’t even reap benefits from the $18 per share stock worth. It’s very much in doubt if we will ever get any of the $45 billion back, let alone a profit. Oh, sure, the “TARP” money will be paid back, but with what money — not with BofA’s profits, but from the free money they’ve got and continue to get from Ben Bernanke at the treasury and the FDIC.