Bank of America CEO Ends Employment Pact
CHARLOTTE, N.C. (AP) _ The chief executive and chairman of Bank of America has dropped his employment contract because he wanted his pay to be based on performance, the bank said in a routine regulatory filing.
The company’s board agreed to terminate the contract at Ken Lewis’ request, a spokeswoman said Tuesday. The contract would have expired in September.
The decision comes as Bank of America prepares to complete what was initially valued as a $47 billion takeover of FleetBoston Financial Corp. The move will create a banking giant stretching from California through the South and up to New England, with about 5,700 branches and $966 billion in assets.
The newly merged bank will become the third largest U.S. bank in terms of assets.
By scrapping the contract, Lewis gives up financial benefits including the right to severance pay, spokeswoman Eloise Hale said.
The board’s compensation committee now will determine Lewis’ pay based on customer, employee and shareholder satisfaction, she said.
In 2002, Lewis made a base salary of $1.5 million and a bonus of $5.38 million. The company also awarded him restricted stock valued at $11.34 million at the time.
In 2003, he made about $17.5 million by exercising stock options. The company will release 2003 salary information in its proxy filing later this year.
Also in Monday’s 10-K filing, Bank of America, under investigation regarding improper mutual fund trading, said it would pay exiting asset management boss Richard DeMartini up to $4 million in incentive and other pay.
The company said in October that DeMartini would retire as part of its planned merger with FleetBoston Financial Corp. DeMartini was one of four executives mentioned in New York Attorney General Eliot Spitzer’s complaint against a New Jersey hedge fund. Neither he nor the company has been charged with wrongdoing.