Ending a tangled succession process, Bank of America Corp. named its retail banking chief, Brian Moynihan, on Wednesday to be its new chief executive.
He will assume the CEO post Jan. 1, succeeding Kenneth D. Lewis, who came under fire for his decision last year to acquire weakened Wall Street giant Merrill Lynch & Co. in a deal that required the bank to accept one of the largest infusions of federal bailout funds.
Moynihan, 50, was elected unanimously by the board of the Charlotte, N.C., company after directors spent months considering other internal candidates, notably Chief Risk Officer Gregory L. Curl, as well as star bankers from other institutions.
Directors had come close to hiring Robert Kelly, the head of Bank of New York Mellon, a highly placed bank official said. But Kelly pulled out this week after disputes over his salary and whether he would be chairman as well as CEO.
A former executive at FleetBoston Financial, which Bank of America bought in 2004, Moynihan has high-level experience in nearly all of BofA's business lines, the bank said in a statement. The division he now heads serves 53 million households and small businesses nationwide.
"Brian's wide range of experience, his relationships inside and outside of the company, and his demonstrated ability to understand business dynamics and effect constructive change made him the best person for the position," said Bank of America Chairman Walter E. Massey, who led the search.
Lewis became CEO in 2001 and built BofA into the country's largest bank. His tenure became controversial after Merrill Lynch's losses proved far greater than expected when the deal was struck at the height of the financial crisis in September 2008.
The losses prompted the Treasury Department to boost its investment in Bank of America under the Troubled Asset Relief Program to $45 billion. Despite the bailout, Merrill Lynch employees received billions of dollars in year-end bonuses -- rewards that critics on Wall Street, in Congress and at regulatory agencies said were never properly disclosed before the deal closed.
Lewis, who also came under fire for Bank of America's takeover of struggling mortgage giant Countrywide Financial Corp. in Calabasas, was stripped of his position as chairman of BofA by a shareholder vote in April. In September, he announced his intent to retire at the end of the year.
Bank of America last week repaid the money it received under TARP, but the company's problems with the government continue, including a Securities and Exchange Commission lawsuit alleging it misled shareholders into believing Merrill would not pay bonuses. In fact, the SEC says, when shareholders voted to back the takeover, the bank had already OKd as much as $5.8 billion in payments, of which $3.6 billion was actually issued.
The company agreed to settle the SEC suit for $33 million, but a federal judge disallowed that deal, saying the penalty should be greater if the allegations were true. The case is scheduled for trial in February.