State Treasurer Denise L. Nappier,
acting on behalf of Connecticut pension funds, called Tuesday for the resignation
of Bank of America's
CEO Ken Lewis and said she'd vote against his re-election to the board because
of issues stemming from the Merrill Lynch acquisition. Nappier,
who oversees the $20 billion Connecticut Retirement Plans and Trust Funds, will
also vote against Temple Sloan, lead director of Bank of America, and Tom Ryan,
chairman of the governance committee.
The Connecticut funds own 3.2 million shares
of Bank of America
with a current market value of $34.3 million, reflecting $57 million of
unrealized losses as of Monday. The state also is a significant client of the
bank.
"In the interest of Bank of America's future growth and
success, it's time to clean house and set the financial health of the company
on a sustainable path," Nappier said.
She said investors have lost confidence in Lewis and the board, and called for
him to step down and for the board to announce plans to substantially
reconstitute itself by the next annual meeting.
The federal government has invested $45 billion in Bank of America and
guaranteed to limit losses on a portfolio of its troubled assets, and a
substantial part of the aid supported the company's acquisition of Merrill
Lynch last year. The deal was controversial because of its price, and questions
arose over whether Bank of America
and Merrill provided proper disclosure about bonuses granted to Merrill
employees just before the acquisition.
Nappier
said she would vote against Bank of America's executive pay package and
vote in favor of separating the chairman and CEO positions.
"The fact that key decisions about executive pay such as foregoing bonuses
were driven by the CEO and not the compensation committee (of the board) shows
that this board is in dire need of independent board leadership," Nappier said.
RiskMetrics Group and Glass, Lewis and Co. -- firms that advise shareholders
on how to vote on corporate issues -- have recommended that shareholders vote
to oust Lewis as chairman of Bank of America's board.