Outgoing Bank of America Corp. chief executive Ken Lewis will receive no compensation in 2009 after a review by the Obama administration's pay czar.
Ken Feinberg suggested that Lewis receive no pay for the year, and Lewis agreed, bank spokesman Bob Stickler said. Lewis "felt that it was not in the best interest of Bank of America for him to get into a dispute with the paymaster," Stickler added.
Lewis, whose Charlotte-based bank has received $45 billion in government loans, announced last month that he plans to retire at the end of the year. He has been under fire for the Jan. 1 acquisition of Merrill Lynch & Co., which required $20 billion of the government aid and drew extra scrutiny of the bank's compensation.
Lewis received $1.5 million in salary in 2008 but no bonus. He will pay back the salary he has already received this year.
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The bank made the decision voluntarily, a person familiar with the matter said. The bank did not believe the pay czar had the legal authority to "claw back" all of Lewis' salary, the person said.
Stickler, the bank spokesman, said the bank continues to talk with the pay czar about the compensation of other executives.
Feinberg's decision raises questions about the judgment of the board members who approved Lewis' salary in the first place, said Stephen Davis, at Yale University's Millstein Center for Corporate Governance and Performance.
"This is one loud signal to boardrooms . . . particularly in the financial services area," Davis said.
Feinberg is also reviewing the pay of top executives at six other financial firms, including Citigroup. It's likely that he singled out Lewis this week because of Lewis' impending departure.
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