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BANKING

Ken Lewis' BofA exit kitty: $68.8 million

October 03, 2009|E. Scott Reckard

Bank of America Corp. owes Kenneth D. Lewis, who is quitting as its chief executive at year's end, $68.8 million on his way out the door.

Lewis accumulated that amount in his 40 years of work at Bank of America and predecessor companies.

Topping the list of assets is a lump-sum pension benefit that was valued at $53.2 million in the bank's last public report on his holdings.

That report, in a proxy filing this year, also said Lewis, 62, had $10.6 million in deferred compensation coming his way. And he will keep 305,000 shares of restricted stock that will vest over the next few years, which, at today's stock price of $16.34, is worth about $5 million.

Total take: $68.8 million.

And that's just the latest bag of booty for Lewis, who's been under fire since his agreement last year to acquire Merrill Lynch & Co. resulted in Bank of America's receiving a $20-billion, second infusion of federal bailout funds, for a total of $25 billion.

Over the years, Lewis accumulated 3.4 million shares of Bank of America stock -- now worth about $55 million -- via stock grants, the exercising of stock options and purchases in the open market.

Lewis, like all longtime BofA shareholders, has reason to regret hanging on to the shares: A year ago, the stock was cruising above $50 a share. It plunged as low as $3.14 in March, when it looked as though the bank and other financial giants might melt down, before recovering again to current levels.

The most disappointing of Lewis' holdings have to be his 2-million-odd stock options, which have exercise prices of $40 to $50, said David M. Schmidt, a senior consultant at executive compensation firm James F. Reda & Associates.

The options are "way underwater," Schmidt said. "The stock price would have to triple for them to be worth anything."

Because the awards to Lewis were made before the meltdown and bailout, the package seems unlikely to come under attack by Kenneth Feinberg, the "pay czar" tapped by President Obama to evaluate compensation at bailed-out corporate giants. Feinberg couldn't be reached for comment.

Although the public may object to the high pay that bank executives have earned over the years, Schmidt said, there is nothing unusual about any of the pieces of Lewis' exit package -- except perhaps the restricted stock grant.

Normally, grants of restricted stock, which recipients can't sell for a certain period of time, lapse if an executive quits before the shares vest, or become salable. But BofA lets its executives hold on to the stock if they depart at age 60 or older.

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scott.reckard@latimes.com

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