Choosing BofA’s CEO

By Felix Salmon
September 30, 2009

Running a bank the size of BofA is impossible. So long as the Fed does its best to make the banking system profitable, you could put a baked Alaska in charge and the bank would throw off billions of dollars a year in profits. The job of the CEO is not really about managing down, so much as managing out — repairing relationships with Andrew Cuomo, Sheila Bair, Barney Frank, Mary Shapiro, Elizabeth Warren, and other Washington VIPs. The board will want an experienced manager, to be sure. But they’ll really want someone with political skills, who can calm the savage beast that has woken up DC and which is eyeing the giant of Charlotte.

Which is one reason it’s not so ridiculous that Sallie Krawcheck is being talked of as a serious contender for the top job at BofA. She has the kind of credibility as a straight-shooter that the company desperately needs, and she might be able to mollify some of the bank’s more antagonistic foes.

Meanwhile, if the board starts looking at external candidates, all such candidates must be thinking in the back of their head that a very similar opening is likely to appear at Citigroup sooner rather than later. Vikram Pandit has done amazingly well just to outlast Ken Lewis — his ability to stay in his job is impressive, even if it’s largely a function of the fact that Citi has no succession plan. But as the last of the great destroyers of value still to be drawing a paycheck, he can’t last much longer.

It’s a good time, then, to be a potential megabank CEO. But it’s still a thankless job. Both banks are too big to manage, and both are likely to be broken up eventually. And that kind of decision can’t come from a new CEO: it has to come from the board.


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The last major bank put a CEO in place to mollify the regulators was Citibank. They place the inexperienced, never a CEO and never a banker Chuck Prince as the CEO. We all know what happened with that failed experiment.

Bank of America needs to find a interim CEO that can groom one of the internal candidates or find a permanent seasoned CEO. It seems to me a candidate like Richard Kovacevich the soon to be retiring chairman at Wells Fargo would be the ideal candidate. He is excellent on cost controls, risk management, focus and delivering results. His track record speaks for itself. What will pull BAC out of the doldrums is not “sucking” up to the regulators, but consistent delivery of results and expectations. Kovacevich would clearly be the best candidate. Now is not the time to turn over the reins to some inexperienced insider. There is too much at stake to let that happen.

Posted by hammer | Report as abusive

Are you kidding me????

Sally was the CFO of Citi when they took all that risk and ultimately crashed and burned. She sat in many risk management committee meetings.

Posted by John | Report as abusive

The CEO of a large bank should be able to understand the complex financial instruments they deploy, or at least have the sense to not use things they don’t understand, just because “all the other banks are doing it and making money”, like loaning money to anybody who is breathing. Most of the people who ran banks that got into trouble had no idea what they were doing, and if they did, then they were guilty of fraud, instead of criminal negligence.

Posted by KenG | Report as abusive

With regard to Pandit – yes he and Shiela Bair may not be getting along. But Citibank was the first to pull the toxic stuff onto its balance sheet, (and may still be the only one), so it is likely it looks a lot worse than the others simply because it is not running a smoke and mirrors operation.

Posted by niket | Report as abusive