Bank of America Corp. Chief Executive Brian Moynihan shuffled his management team, ousting two top executives as the embattled banking giant faces a plummeting stock price and mounting legal woes.
Moynihan on Tuesday announced the departure of Sallie Krawcheck, the bank's head of global wealth and investment management, and Joe Price, president of consumer and small-business banking. Both were top lieutenants to former CEO Kenneth Lewis, who resigned in October 2009.
Krawcheck, one of the most powerful women on Wall Street and a former top executive at Sanford C. Bernstein & Co. and Citigroup Inc., was hired by Lewis in 2009, toward the end of his tenure at Bank of America. Price had been the bank's chief financial officer under Lewis and became head of the consumer bank, Moynihan's former job, in early 2010 after Lewis retired.
The Charlotte, N.C.-based bank named two other executives as co-chief operating officers: David Darnell to oversee businesses focused on individual customers, including credit cards, home loans, wealth management and small businesses; and Tom Montag as head of the businesses that serve larger companies and institutional investors.
Since the second quarter of 2010, Bank of America's global banking and markets business under Montag and the global commercial banking business under Darnell have reported combined net income of $11.5 billion, the bank said.
Moynihan described the departure of Krawcheck and Price as "de-layering and simplifying" to remove a management layer.
Price said his departure stemmed from Moynihan's New BAC initiative, which is studying how to make the bank operate more efficiently and reportedly is considering eliminating as many as 30,000 positions.
"It became evident that streamlining could be done at the top as well," Price said. "Brian made some hard decisions, and it is a good time to step aside and look for other opportunities."
The management shake-up comes as Moynihan strives to sell non-core assets such as foreign credit cards and certain specialty mortgage businesses in a drive to raise capital and reduce risks at his company, the biggest U.S. bank as measured by assets.
Investors have been worried by heavy losses in Bank of America's mortgage business and fear Moynihan may have to sell more company stock to raise capital, diluting the holdings of current shareholders.
Moynihan has expressed confidence that he's gaining control of the bank's exposure to losses and that he can raise sufficient capital by selling nonessential parts of the company and cutting costs. But the stock had been in sharp decline until investor Warren Buffett announced last month that he would sink $5 billion into Bank of America.
Despite Buffett's stamp of approval, shares have begun to sag again on fears of a new global recession and fears that troubles at European banks could spill over to affect U.S. firms.
Bank of America shares Tuesday fell 26 cents, or 3.6%, to $6.99, and are down 48% since the beginning of the year.