Some investors question pay of bank chief Lewis
CHARLOTTE, N.C. -- Bank of America officials said yesterday the recent merger with FleetBoston has created big opportunities, but some shareholders fretted about its chief executive's pay package.
"In almost every line of business, every customer segment and every product category, our position with Fleet customers today is similar to where we were with Bank of America customers several years ago," chief executive Kenneth D. Lewis told shareholders at their first annual meeting since the $47 billion merger.
The deal with Fleet, New England's biggest bank, gives Bank of America nearly $1 trillion in assets. It also will have 35 million consumer and small business customers, about 5,700 branches from coast to coast and 16,500 ATMs.
Bank of America's annual meeting usually is held in April, but the meeting was moved back this year so both banks could hold special meetings in March to approve the deal. The merger became official on April 1.
Several hundred people attended the meeting, filling about half of the auditorium where it was held.
While Lewis chose to focus on the future, past and present concerns were evident in several shareholder proposals and during the question and answer portion of the meeting.
Shareholder John K. Moore asked Lewis why he received $38 million in total compensation, including stock option gains, at a time when the company was laying off thousands of people following the merger.
"If you had to stand up personally and fire the more than 12,000 employees who have lost their jobs and accompany them home when they tell their families, what would you tell them?" Moore asked Lewis.
"I am not going to answer that question," Lewis replied.
Another shareholder, Frank Cole Inman, said he couldn't understand why Lewis was getting so much money. "I think we have a great CEO, but do we really have to pay him up to $38 million to keep him?" Inman said. "I don't think so."
While Lewis did not answer his critics, board member Temple Sloan Jr., who chaired the compensation committee that gave the pay package to Lewis, told Moore that nearly half the compensation was in stock options granted to Lewis several years ago.
"You must realize that it's the number one priority of the board of directors to hire the best management team to run the fifth most profitable company in the world," Sloan said.
The company took a $285 million pretax charge in the first quarter for an agreement to pay $375 million to settle accusations that it allowed favored clients to improperly trade mutual funds.
But a shareholder proposal to require that the bank set up a committee to review mutual fund trading policies was one of five proposals that were all overwhemingly defeated yesterday.
Shareholders reelected a slate of 19 directors and ratified PricewaterhouseCoopers as auditor.
