DealZone

Should Ken Lewis get his payday?

October 1, 2009

Ken Lewis started at Bank of America 40 years ago, working his way up from junior credit analyst to the CEO suite. His employment contract at the nation’s largest banks obviously predates the government’s bailout of Bank of America. Yet pay czar Kenneth Feinberg may have a say on whether he cashes in on retirement benefits and accumulated compensation worth $125 million.

Some argue it is simply inappropriate for Feinberg to try to tackle Lewis’ retirement package.

“A fair reading of the situation would be he is getting what he is entitled to and game over,” said Alan Johnson, a Wall Street compensation consultant.

But to many, Lewis is a poster child for the crisis that struck Wall Street banks last year, nearly collapsing the financial sector and resulting in taxpayers spending hundreds of billions of dollars to bail out firms like Bank of America.

“The Obama administration has to use every tool at its disposal to fix the pay problem, particularly the golden parachute for failed executives,” said Richard Ferlauto, director of corporate governance and pension investments for the American Federation of State, County and Municipal Employees, one of the largest U.S. labor unions.

Should Lewis get his retirement package in full? Leave your answer in the comments section.

Comments
27 comments so far | RSS Comments RSS

As an utter failure, he deserves nothing except an investigation into possible crimes.

Posted by robert1234 | Report as abusive
 

YES, Mr. Kenneth Lewis should receive his previously promised pay. He is this country’s most honest, ethical, patriotic, competent corporate manager by far. He is the victim of a political vendetta by the liberal, Wall Street cabal of thieves who are responsible for our catastrophic economic/financial crisis and who do not hold the long-term interests of the United States at heart.

 

He does not deserve the payout as he misled shareholders in acquisition of Merrill Lynch. If he was pressured into the deal, shareholder had every right to be informed before voting on the deal. This resulted in the sharholders making an uninformed decision leading to the destruction of the value of the company and the brand.

Posted by GMVashist | Report as abusive
 

NO. Ken Lewis epitomizes the con side of capitalism. When a company performs well, a CEO reaps the huge financial benefits because they’re ultimately responsible for the company’s performance. But when a company’s stock tanks and investors lose their investments, a CEO…reaps…the huge…financial…benefits?? Rewarding this kind of catastrophic failure with millions of dollars is outrageous, and should be criminal. This is legalized theft.

Posted by Bill | Report as abusive
 

Rather than argue liberal – conservative idealisms, one should ponder on what would have become of BOfA had the government not have intervened. Had the bailout not occured, did BOfA cleaim that they would become insolvent? They would have been liquidated to creditors and Lewis would recieve nothing. He should be so fortunate that the stock he holds is worth more than the paper it is written on.

Who knows how this will pan out. The bottom line is that before the government, or any investor pours money into something like this they should take a look at instances such as this. If people with contracts of this magnitude are on the books, they would have to be renegotiated. Perhaps a little more time and analysis should have been taken into consideration before making the loan. Isn’t that what got us into this mess in the first place???

Posted by Charlie | Report as abusive
 

Yes! Mr. Lewis does deserve the compensation and he should get every penny of it.
Lewis is the guy who made BofA the top bank in USA. He dedicated all his life to the company. He was very aggressive and smart in his acquisitions to try and grow the bank.

Of all bank executives Mr. Lewis is the best of them.

BofA will miss one of its best executives to ever run BofA.

Posted by Brian | Report as abusive
 

He knew what was going on all the time, he should be arrested and charged with gross neglegence and miconduct unbefitting to a person in his position in the bank
He should have the full weight of the law taking him down and locking him away for at least ten years with no remission, he is to do the full ten year strech

Posted by Steve | Report as abusive
 

Mr Lewis, another CEO who did a great job running his business into the ground. Should he get a nice reward for this? Paid by the average citizen’s hard earned taxdollars? Probably not.

Posted by Peter Ketels | Report as abusive
 

With the high cost of luxury second homes,
mega-yachts, rare wines, and collectibles,
a more reasonable figure would be $500M.
Long live the financial class that runs
the show!!!

Posted by Louis XVI | Report as abusive
 

If a doctor gave all his effort for years on end to do whats best for a hospital and to tried desperately to save your life, but failed, would you suggest that he get nothing for it and be investigated for his crimes?

He did the best he could, and I don’t think he can take much more. He deserve to be paid and somewhat rewarded for his efforts, but the result also comes into consideration in the end… $125million is excessive. Maybe $1million a year for the few years of life he has left in him.

Posted by Christian Rennes | Report as abusive
 

Ken Lewis deserves what he, shareholders and the board agreed on. When times are good times are good but when times are bad we need a scapegoat. If he is found to be responsible for non disclosure of information to shareholders or any breach of trust, it is a matter for the courts to determine, not the pay czar. Finally, I’d like to know what the pay czar makes. If you do not know what a member of congress makes after retirement (With full medical benefits.)you should research. Now that’s criminal.

Posted by formerbanker 08 | Report as abusive
 

Mr Lewis should get whatever he would have received if the bank had been allowed to go bancrupt. Maybe his pension would have been preserved but I doubt his stock would be worth much.

Posted by harry | Report as abusive
 

There is no way that he should be paid 125 million dollars? That is way to much money, the top CEOs of banks outside the United States don’t even make 125 million dollarsin their entire career! way too much money, put your head on straight.

hahaha liberal conspiracy? you are ridiculous and uneducated

Posted by Steven Allik | Report as abusive
 

They should have been left to fail. If they had, his share of nothing would be a non-issue. Let him become 100% owner in a company with no means for government funds, rattled by lawsuits, and on and on…let the shareholders and others go after the assets instead of wasting more government money debating how to change the law to the silly cash merry go round.

Anybody who thinks these decades of sweeping bubble after bubble under the rug while wages dropped, savings dropped, benefits vanished and we (both as a nation and as individuals) went from highest credit status to debt for the record books while everybody whistled in the dark.

We need to return to building advanced facilities here, where workers again become actual consumers, and stop shipping everything overseas where there is no such thing as a consumer base. All we’ve done my whole life is ship tons of cash out of the country like this would never be a problem. The fair trade spoken of in the earliest state of the union addresses was of reciprocal type, and not the quick buck, and part of decades of the addresses stated cash in, cash out and how much went to pay the “sinking fund” as the revolutionary debts were called.

Everybody who bought a house thinking they could sell in under a year for profit…took out multiple credit cards (then whined after the fact about terms that were irrelevant anyway considering the debt incurred…interest free they’re still done for)…we’re bailing you out and handing you freebies as much as the failed CEO. If I could count the number of people I’ve seen run to bankruptcy as soon as they figured out they got a “get out of life free” card (and get to keep all the toys…

To me it’s all no different than going in a store and running out the door with a tv under your arm. Buying with others’ money (or CEOs gambling with others’ money) is ethically as bankrupt as the bottom line.

We’re sinking anyway…even if the three stooges are trying to pan the water over the side. The longer we bail them out, the longer we suffer, and the harder to ever have a life as wwe were raised to expect it.

Posted by brian | Report as abusive
 

No way I worked for 30 years for MBNA and B of A and my package looks like sh…

Posted by Betty Henderson | Report as abusive
 

The Bankers Remuneration debate is a smoke-screen put up by our leaders so nobody notices they aren’t implementing regulations which could prevent a repeat of the banking melt-down. Leverage is probably a bigger problem than bankers pay. If they have tight contracts the legal bills won’t be worth the tax-payers time to fight in court.

Posted by Peter H | Report as abusive
 

Ken Lewis retirement may be very ill timed. He should wait for the court to approve the SEC-BoA settlement, which I hope will result in a far more equitable fine of perhaps $300 million. Then, in view of this great accomplishment, he would receive a special bonus that doubles his retirement payout. That, my friend, is staying true to Wall Street capitalism. Or socialism, or fascism — I am sort of confused.

Posted by The Real Deal | Report as abusive
 

Ken Lewis is owed a gigantic bonus by Paulson, Bernanke and Pelosi for every day he doesn’t literally cash them in, cut them off and Bank-Of-Americanize them to pieces. Lewis may be all those knaves have between them and what’s coming to them for complicity in the diabolical TARP- Merrill Lynch equation.

They owe him their lives and should pay him accordingly.

Do I hear five bucks…?

Posted by The Bell | Report as abusive
 

Honestly.. Give the old man a break..

40 years of his life has gone to the making of America a better country with his life contributions to the Bank Of America.

Let him get his well deserved money and have a good retirement no matter how badly he has done in the past years, shouldn’t affect the outcome of where he gets his retirement funds.

Posted by Clone | Report as abusive
 

As a deeply disappointed shareholder of the Bank of America, I am concerned that the retiring CEO is not accepting accountability for his woeful mismanagement of the company and its merger with Merrill Lynch conducted without adequate due diligence and the consequences for shareholder in the price collapse, from which it might take years to recover. Two years pay with conventional pension rights is all I believe should be paid for this banker who failed in his primary task of preserving and enhancing the reputation of the bank as a safe haven for investors and depositors money.

Posted by Henry Michael Horton | Report as abusive
 

Where has everyone been. The congress, wall st and the offshore hedge funds set this entire disaster up and then tried to cover the failures up. Warren Buffett on his last interview stated that if B Of A had not taken Merrill when they did our value of currency would be next to nothing. the real thieves are the congress and Paulson who helped setup this fiasco. Has Lewis been perfect. No> but he has done the best that anyone in position could have done with the threat of the most powerful government in the world threatening you from day one in the downturn and demise of our financial system. The FDIC is daily closing banks that are not bankrupt but are bankrupted by the fdic. look at the takeovers and the new bank that gets the assets they are making a fortune while the FDIC rolls up the banking system. I do not see anyone standing up to the takeover of our financial system. People keep sticking their heads in the sand. Lewis deserves the retirement, yes his stock could have been worth nothing just like yours and mine that we hold in us companies that our government appears willing to take at any time.

 

Funny how now one gives out when things are going their way. 40 years in the making of BoA the only thing we’ll remember is it’s last year as a CEO. Give him what he’s entitle.

Posted by Cedric | Report as abusive
 

well lets put this into prospective. did he accumulate the 125 million over 40 years or did it all come to him in the last 5. thats the question?? if he accumulated it over the life of his service then he is entitled. but if its just a corporate overpay “like usual”. then I say “no”. cause money gained in the short term was not worked for. and in essence, giving him those kind of funds seem more of a payoff then a salary.I know when someone gives me a check and i try to cash it at their bank. i am charged 5.00 check cashing fee for cashing their check at their bank.soo why the fee?? you want me to approve 125 million dollar payout. I now see where the check cashing fees go.

Posted by mike | Report as abusive
 

He saw his bank on the verge of collapse. Only because of Gov funds BofA was able to avoid bankruptcy. Why he should be paid anything until his bank pays back gov money.

Many people under impression that Ken Lewis and Co have some unique SKILLS that put them apart from simple people.
Just revisit they actions during 2008/2009. Bunch of guys complitly disconnected from reality. They are masters of corporate politics and bureaucracy.

Posted by Sergey | Report as abusive
 

YES! Ken Lewis deserves his retirement money.
He dedicated years of his life to the company. He avoided aggressive take-overs when stocks were flying high. Maybe the Merill deal wasn’t good, but most probably it wasn’t bad either. Time will tell. Yes, he could wait a bit and buy Merill for pennies, but as Warren Buffett said, by buying it earlier, most probably he saved the whole US financial system.
Has anyone tried to evaluate the value of the real estate that BofA got in that deal? Over 10,000 branch offices in the whole US added to the 6,000 already owned. In several years when the dust settles down, BofA will be probably the largest bank in US. Oh, and don’t forget about that Countrywide deal.
If Mr Lewis wasn’t forced to step down, then I would be 100% sure that BofA stock will be trading for above $100 5-10 years from now. Now I’m not sure, because the new CEO may not be as good.
BTW, do you know why Warren Buffet bought the BofA stock in the spring of 2008? The answer is: because Ken Lewis did forgo all his stock options, because he didn’t want to dilute shareholders equity.
To all those who say he doesn’t deserve his pay: READ THE LAST FIVE 10-Ks OF BOA BEFORE YOU SPEAK!
Ken Lewis is one of the best and honest executives. Period.

Apparently the media like to give a scapegoat to the misinformed public. Probably to redirect public focus from the true financial criminals.

How about the people who helped in creating this whole financial mess? Namely Alan Greenspan and Bill Clinton who created the housing bubble. Why the press is not telling the truth about senator Obama who with other senators and lawyers in 2004 were suing big banks for restricting lending due to “housing bubble”? In 2008 the same banks were being sued for doing what they were forced to do 2004. Now Mr Obama won the Nobel Prize.
Does he deserve it? What did he do to for the world peace, except promising withdrawal of US troops from Afghanistan and Iraq? That’s funny, Ken Lewis got his bonuses for the work he did, while Barack Obama got his prize for empty promises.
Much better article and a much better question would be: Should Barrack Obama get his prize?

 

Yes, he should get paid if it is a contractual requirement. To do anything else is to ignore the law because it is popular politics. I do agree that his compensation should at least be delayed until B of A
pays back any money owed to the government. I also agree that much of B of A’s problems came from government coersion. Do everyone a favor, fire the Pay Csar and tell BA that they can pay out the executive packages that they contractually owe as soon as BA is off the hook with the governement.

Posted by tim | Report as abusive
 

NO!!!!!!!

Posted by Paul Velasco | Report as abusive
 

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