North vs. South
Bank of America was a famously southern institution when it grew across America’s map like kudzu, known for its “Charlotte mafia’’ of top executives and directors who called all the shots.
As if there wasn’t enough evidence that times have changed, consider this: Three of the six directors who will recommend a new chief to succeed the abruptly retiring Ken Lewis come from New England.
Bank of America chairman emeritus Chad Gifford, CVS Caremark Corp. chief Tom Ryan, and NStar CEO Tom May - all board holdovers from the 2004 acquisition of FleetBoston Financial Group - account for half the steering committee seeking the bank’s next chief executive. Gifford could even emerge as an unlikely interim chief if an emergency fill-in is needed.
You can imagine how this is going over in Charlotte, N.C., where banged up Bank of America had been a revered example of Southern business achievement and prosperity. Now Northerners may be calling the shots at a critical moment, and they’re not even from New York.
Coverage in the Charlotte Observer focused on the search group’s “Boston accents.’’ The paper pressed the husband of Bank of America’s largest individual shareholder, local business executive C.D. Spangler, on whether Charlotte’s bank headquarters status might be on the line (he didn’t sound sure).
Bank of America’s geographic power shift is being closely watched from all directions. Even the Financial Times in London points out how the CEO search and the panel’s composition is splitting the bank into factions from North and South.
The real heart of this dispute can be boiled down to two words: Brian Moynihan.
Moynihan, a former Fleet executive from Boston, is an inside candidate with a shot at winning the chief executive’s job. His career trajectory and prospects were dissected here last week. Moynihan would have been a clear favorite if he had another year or two of experience, but the Lewis departure made a mess of that timetable.
The Southern view looks like this: A former Fleet guy from Boston is trying to persuade a panel packed with former Fleet directors he should run the Charlotte bank. It’s not very popular. On the other hand, directors in Boston are said to bristle at the suggestion they would be so parochial.
The competition is taking place in private offices and public newspapers. Unflattering comparisons between Moynihan and Charles Prince, who led Citigroup into the financial abyss, are popping up. That’s catchy because both are lawyers who could or did run big banks, but patently unfair.
Old Bank of America loyalists have their own ideas about who should run the company, and he is one of them, or at least he used to be. They like James Hance, a former chief financial officer at Bank of America who works at the Carlyle Group now.
“There’s a certain amount of sour grapes about the whole thing, a certain amount of ‘We bought Fleet, they didn’t buy us,’ ’’ says bank stock analyst Nancy Bush of NAB Research. “It’s silly.’’
Silly or not, former Fleet directors will have a powerful influence selecting a new bank chief. But the stage was set for something dramatic like that earlier this year.
Bank of America, under government pressure, has been revamping its board of directors all year. Lots of directors took a walk and some new board members were added. The old guard lost a lot in the transition.
Directors like former Lowe’s Cos. chairman Robert Tillman from Mooresville, N.C., auto parts executive O. Temple Sloan Jr. of Raleigh, N.C., and retired software executive Jackie Ward of Atlanta all stepped down. A couple of directors from Boston, Gary Countryman and John Collins, also moved on. But the real shift in geographic power took place in all those departures by midsummer. The irony of any internal competition to pick Bank of America’s next leader is that it ignores one critical factor. Federal regulators are the people with the real power in this selection process and the odds may favor a total outsider.
“People in Charlotte or Atlanta or wherever have to get used to the new reality in banking, which is that the regulators are going to be sitting on your head until as far as I can see,’’ says Bush.
That won’t stop people from fighting over the job.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com. 
