Gifford retiring early at Bank of America

Chad Gifford, one of Boston's most visible business leaders, said yesterday he would retire as chairman of Bank of America Corp., just one year after selling the region's largest bank to executives in North Carolina.

Gifford had been chief executive of FleetBoston Financial Corp., but he took on the role of chairman of Bank of America after the Charlotte bank acquired Fleet in April for $48 billion. Gifford had agreed to that role for two years, but he is leaving just eight months later.

Gifford, 62, said in an interview that he decided to leave the chairman's role early because he thought the merger with Fleet has been successful. Bank of America's stock price is soaring, and its internal data shows that the combined bank has added thousands of customers in the Northeast, executives said.

"It became increasingly apparent this made sense," said Gifford, who said the decision did not truly hit him until he saw a draft of the press release headlined "Bank of America Chairman Chad Gifford to Retire." "If you're sitting as chairman of the board, and most of the work is done, that means it's just time."

He is the highest-ranking former Fleet executive to leave Bank of America after the merger, which was negotiated last October. Two other senior Fleet executives, Eugene M. McQuade and Bradford Warner, resigned from top Bank of America jobs in the last several months.

Gifford will remain on Bank of America's board of directors, though not in the role as chairman. He also will leave his role as chairman of Bank of America's charitable foundation.

As head of the region's predominant bank, Gifford has long been the go-to executive for politicians, nonprofit leaders, and others seeking funding for new programs or support for civic projects. When Mayor Thomas M. Menino wanted to bring the Democratic National Convention to Boston, Gifford was among the first people he called. Bank of America later donated $2 million, Menino said.

"He wanted to know how the bank could be helpful," said Menino, who talks to Gifford several times a month about issues ranging from Boston's public schools to affordable housing. "He was always willing not just to step up, but to lead."

Gifford has served on the board of a variety of nonprofit organizations, including Northeastern University, the Boston Symphony Orchestra, and the Dana-Farber Cancer Institute. He helped expand Fleet's presence in low- and moderate-income communities, chairs an endowment to support Boston's public schools, and encouraged corporations to adopt domestic partner benefits for gays and lesbians.

One of Gifford's star moments came in 1994 when he worked for Bank of Boston, which later merged with Fleet. Gifford helped finance Robert Kraft's purchase of the New England Patriots, keeping the football team in New England.

"They were critical to facilitating the deal," Kraft said. "The buildup had been that the team would be moving to St. Louis. But Bank of Boston gave us the loan that allowed us to purchase the team and keep it here."

Gifford often played a pivotal role at the intersection of sports and politics. After Kraft and the Patriots signed a tentative deal to move the team to Hartford, Gifford helped broker legislation to provide state assistance to build a new stadium in Foxborough, keeping the team in Massachusetts. He also helped break a stalemate that led to a new arena -- later named the FleetCenter -- constructed to replace the old Boston Garden. When the Red Sox sought state help to build a new ballpark next to Fenway Park, Gifford again stepped up and helped persuade the Legislature to fund the deal. That plan ultimately was scuttled when the Red Sox were put up for sale.

Gifford, a lifetime banker raised by a banker, spent his career working his way up within Bank of Boston. After reaching the top role, he agreed to merge the bank with Fleet in one of the city's most bruising and controversial bank mergers.

At Fleet, stretched thin by years of mergers as it gobbled up banks around New England, Gifford began to emphasize customer service. But Fleet soon encountered problems of its own, including losses in its investment bank and its Latin America operations. Gifford put the bank on the road to recovery, then sold Fleet to Bank of America as it began to make its turnaround.

In that Bank of America deal, he secured a guarantee from the Charlotte executives to maintain the same number of employees in the region that Fleet had before the merger. Though Bank of America executives encountered fierce criticism from Massachusetts politicians over job cuts earlier this year, they said they plan to keep that employment promise.

Gifford's departure as chairman is unlikely to affect Bank of America's day-to-day operations in Boston or across the country. Though he has been an important public face for the bank in the months following the deal's announcement, several other bank executives in Boston have assumed more visible and powerful roles in recent months.

One of these executives, Anne Finucane, Bank of America's president of the Northeast, plans to move into Gifford's spacious corner office, and she is expected to fill much of the same public leadership role that Gifford did.

Bank of America's chief executive, Kenneth D. Lewis, said Gifford first approached him about a week ago and said he was thinking about retirement. During those conversations, Lewis said, Gifford said he was happy with the progress of the merger but that he felt strange as a chairman after years of making day-to-day decisions as chief executive.

"He basically said being a non-executive chairman after you've been a CEO was unnatural," Lewis said. "I can see where he's coming from."

Lewis will replace Gifford as chairman.

Gifford holds about $38 million worth of Bank of America stock, according to the bank's most recent filings. He received a gift of $6.5 million in restricted stock in February, which will not vest for three years. He also received $11 million in compensation in 2003, which included $992,000 in salary, a $6 million bonus, and $3.8 million in stock. Financial terms of Gifford's retirement package were not disclosed yesterday.

Gifford's retirement came on the same day that US Representative Barney Frank, Democrat of Newton, held a congressional hearing in Boston to discuss the effects of big bank mergers, especially Bank of America's merger with Fleet.

Frank said yesterday that the hearing went well and that he was not upset at the timing of the bank's announcement. "I don't consider it as an effort to interfere," he said.

In retirement, Gifford said, he plans to take a few months off before deciding what to do, though he likely will stay involved in Boston's public schools and other nonprofit groups. He said a run for political office is not likely, but that he may become more vocal on diversity issues, especially gay rights.

One of Gifford's sons is gay, and he said he is considering whether to speak more publicly about his family and his support for gay marriage.

But he does not plan to leave his office in downtown Boston without a few mementos. The longtime bank chief has a collection of bank memorabilia sitting in a pile at home, including about 100 T-shirts, he said. He now plans to add one more item: the gold Fleet logo from the outside of the bank's former headquarters, which was replaced by a Bank of America sign during the merger.

Sasha Talcott can be reached at stalcott@globe.com.