Bank of America - Merrill Lynch Merger

[HopHead]

They shuffled around management and came up with five possible successors to Ken Lewis.

I don't know the background of these five or their ties to Charlotte.

CNBC Article

I would say it's pretty much zero... By the time Lewis does step down the company will be operating out of NYC, even though the HQ will technically still be here.

[JayGee]

I would say it's pretty much zero... By the time Lewis does step down the company will be operating out of NYC, even though the HQ will technically still be here.

I'm not so sure the HQ will technically still be here. Unless the new CEO stays here. That usually defines the HQ location.

I'm sure they will always have substantial operations here, really there is no compelling reason to move, but the prestige for Charlotte of the HQ location is definitely at risk.

[peaceloveunderstanding]

I would say it's pretty much zero... By the time Lewis does step down the company will be operating out of NYC, even though the HQ will technically still be here.

Krawcheck went to UNC Chapel Hill and grew up in SC.

The article doesn't really list all the potential successors.

[BB in QC]

Krawcheck went to UNC Chapel Hill and grew up in SC.

The article doesn't really list all the potential successors.

This is a shotty article at best. It just changes around five people and says they are the possible replacements which is not completely true. Unless something has changed very recently, I know Barbara DeSoer is still very much on that list. I think that just because 5 people's jobs changed does not mean that those 5 are the ones in the running for CEO. This is a huge leap in logic in my opinion.

[cltbwimob]

"I'm not so sure the HQ will technically still be here. Unless the new CEO stays here. That usually defines the HQ location."

That is not necessarily true. Al Molina, CEO of Detroit-based GMAC, still lives in Charlotte.

[monsoon]

BofA has agreed to pay a $33M fine, a slap on the wrist, to the SEC for how it handled Merrill Lynch last year. BofA gladly accepted this settlement because no executive was charged and they did not have to admit they did anything wrong. A number of members of congress have expressed outrage at the seemingly low amount and penalties related to this. I believe the investigations still gone on in regards to criminal behavior related to TARP which the SEC isn't involved in. More to come.

[Charlotte_native]

That is not necessarily true. Al Molina, CEO of Detroit-based GMAC, still lives in Charlotte.

This actually proves the reverse point. GMAC will fly its corporate flag in Detroit, but will effectively be run out of Charlotte within a few months. Straight from a friend who works them and has been helping one of the transition teams. Detroit has enough bad press going on right now without a big corporate citizen officially announcing they are leaving (gone).

Though I doubt BofA will move the HQ from here, they certainly could and if they move much or most of the upper level management including the CEO that effectively is a move regardless of what you call it. Important to me, right now, isn't the symbolizm of being here, but the operations and thousands of employees still being here.

[cltbwimob]

This actually proves the reverse point. GMAC will fly its corporate flag in Detroit, but will effectively be run out of Charlotte within a few months. Straight from a friend who works them and has been helping one of the transition teams. Detroit has enough bad press going on right now without a big corporate citizen officially announcing they are leaving (gone).

Though I doubt BofA will move the HQ from here, they certainly could and if they move much or most of the upper level management including the CEO that effectively is a move regardless of what you call it. Important to me, right now, isn't the symbolizm of being here, but the operations and thousands of employees still being here.

I was only making a counterpoint to the poster that said CEO location usually defines HQ location. But I still think Charlotte will be the HQ in both name and in reality. Charlotte has twice as many B of A employees as New York, and 5 of the 12 top executives are still based in Charlotte, leaving the other 7 to be based in several different areas where the bank has made acquisitions (i.e. California, Boston, New York, etc...). Besides, B of A's Consumer banking division is run from Charlotte and is their largest operation.

By the way, I think everyone (especially those at the Observer who always seem to think that the bank is in the process of packing up and leaving) has forgotten about Hugh McColl. Although he no longer works at the bank, I would be willing to bet that he still carries some weight at the bank. After all, he did make it what it is today, and I think he is their largest individual shareholder. Of course this is all just speculation on my part, but I don't think he would give his "blessing" to an HQ move. He even said a few months ago that he does not think that BofA HQ will ever move.

[monsoon]

^Hugh McCall is irrelevant in this process now. BofA has to worry about the federal regulators, the Congress, the President, and what the various state district attorneys and especially the one from NY State. McCall has 0 influence over any of this these days.

[caterpillar2]

Ken Lewis' new executive management team and where they are based:

1. Brian Moynihan- Boston

2. Ric Struthers- Wilmington, De.

3. Tom Montag- NYC

4. Sallie Krawcheck- NYC

5. David Darnell- Charlotte

6. Steele Alphin- Charlotte

7. Greg Curl- Charlotte

8. Barbara Desoer- Calif.

9. Anne Finucane- Boston

10. Joe Price- Charlotte

[cltbwimob]

^Hugh McCall is irrelevant in this process now. BofA has to worry about the federal regulators, the Congress, the President, and what the various state district attorneys and especially the one from NY State. McCall has 0 influence over any of this these days.

But I don't think federal regulators are trying to push BofA to move it's HQ...That is pretty much at the mercy of Upper level management, the board of directors, etc. My point about Hugh McColl (once again, purely speculation) is that if the bank were to try to move it's HQ I don't think Hugh McColl would like the idea. And although he theoretically is irrelevant to the bank, I would imagine he still is a major "advisor" to upper level managemnt. He did hand pick Lewis and like I said before I think he is the largest individual shareholder.

I also must correct myself...Charlotte has 5 of the top 11 execs ( I said 5 of 12 previously), and a sixth, Sallie Krawcheck is a South Carolina native and UNC grad so 6 of 11 have NC ties. It's not as bad as the Observer would have you belive...Carolina affiliated individuals still have more say than NYC or Boston based officials.

[atlrvr]

I'd feel a lot better about it if Brian Moynihan wasn't given the latitude to run Consumer Banking from the Boston outpost.

I really think it comes down to Brian or Barbara (who used to live in Charlotte until BofA bought Countrywide and adopted their mortgage management platform).

My opinion is both Sallie and Tom are "tainted", and assuming that BofA is operating under the government magnifying glass, it might be hard for them to move up.

Steele and Anne aren't contenders by virtue of their current positions IMO.

David is going to have to pull off a miracle, as I assume commercial real estate rolls up to him, and he is going to be showing a lot of red ink in the next couple of years.

Joe is an amazingly nice, thoughtful man.....unfortunately those characteristics don't define a bank CEO.

Don't know about Greg....I'll lump him with David, in that he has a lot of negatives headed his way, and he can make a name for himself if he can mitigate the expected credit issues.

I really don't know about Ric, though I just don't see any way for him to shine....the credit card portfolio is going down the toiler, and new government consumer protection laws are going to make his life even tougher to turn things around. He never seems to get mentioned as a possibility, and I can't imagine that changing.

EDIT.....My revised pick. Timothy Geither.

[JayGee]

I'd have to agree with Monsoon on the McColl issue. While he is mostly an admired figure in Charlotte and it is sentimental to think he would have some influence, this is the banking business and it is a business in the worst shape it has been in years. I don't think his opinion would mean a whole lot, unfortunately.

HQ might move to NYC, but fundamentally, I don't think that would hurt much more than civic pride and possibly civic donations/investment. Not a small matter, but I don't think employment would be affected very much.

Then again, this could just be the latest "OMG BofA is moving their HQ!" false alarm.

[southslider]

In this economy, virtually no one is getting a salary increase. Given the higher costs of living in Boston and NYC, you can bet on Charlotte having a sustained presence.

[monsoon]

I really don't see why BofA would move it's HQ. This isn't going to solve any of its issues and would only serve to focus more negative attention on it that it really doesn't need. BofA's big problem is can it deliver on some real financial results which is why I assume all these shifts are going on. BofA owes the federal government a huge amount of money, and until they pay that back, they will be subject to meddling by the politicians. Politicians who are going to be feeling the political heat, come the 2010 election, to answer for what happened to the economy at the hands of the banks.

The other issue I see with BofA is the loss of retail customers. They continue to piss off customers and they are routinely cited by a number of consumer sites as a bad company to do business with.

[monsoon]

BofA has agreed to pay a $33M fine, a slap on the wrist, to the SEC for how it handled Merrill Lynch last year. BofA gladly accepted this settlement because no executive was charged and they did not have to admit they did anything wrong. A number of members of congress have expressed outrage at the seemingly low amount and penalties related to this. I believe the investigations still gone on in regards to criminal behavior related to TARP which the SEC isn't involved in. More to come.

Sure enough on the "more to come" department. A federal judge has rejected this settlement. This most likely means stiffer penalties coming, and maybe some directed at individuals running the bank, or a long court case.

[uptownboy]

I guess this will pretty much clears up the fact of how a HQ is denoted as such:

From the Observer:

Bessant's new job is part of the bank's New York-based corporate and investment banking business, but she will remain in Charlotte. Bessant is a past Charlotte Chamber chairman and is set to lead the Foundation for the Carolinas board starting in January.

[tozmervo]

So long, Kenny. Take the money and run. To another country. One without extradition treaties.

[voyager12]

A good thing ^ the man had become a pinata for everyone to take a wack at. I have not really kept up with all the drama involved with BOA's ill fated acquisitions but Lewis certainly deserves some of the blame. Before the economy crashed he had been lionized by the national media for creating such a powerhouse of a bank out of little ole North Carolina. Now, he will mostly likely only be remembered for contributing to it's current shambles.

If the new CEO is not Charlottecentric I think it will only increase the chances of an eventual HQ reloc to NYC. The tower going up there sure does scream Headquarters to me....

[peaceloveunderstanding]

The HQ move talk, especially from the major daily, always gives me a chuckle.

It's a prime example of Charlotte's insecurity.

[JayGee]

The HQ move talk, especially from the major daily, always gives me a chuckle.

It's a prime example of Charlotte's insecurity.

In typical media fashion, 36 said 'the fate of 10,000 jobs'. Moving the HQ will not cost 10,000 jobs in Charlotte. They should know better. As big an ego bruiser as it would be, it would have minimal impact on jobs. Biggest impact will be bragging rights and possibly civic contribution, and there probably is not a whole lot of that lately.

[HopHead]

The HQ move talk, especially from the major daily, always gives me a chuckle.

It's a prime example of Charlotte's insecurity.

I agree. The reality of the situation to me is, does it really matter where the CEO lives? If they hired someone who was based up in Boston or NY, do they have to move the HQ? Not really. So many companies are de-centralized in how they operate today. Especially for an organization as large as Bank of America. Ken Lewis spends a ton of time up in NYC but he lives here. BofA probably has 6 or 7 million sq ft of office space here, many infrastructure components, and building another tower in uptown. I work for a very large IT company that's based in CA. I'd say there are probably a handful of executives that live in the HQ'd bay area city. Most employees either work out of the home or work in one of our dozen or so regional offices.

[JayGee]

I agree. The reality of the situation to me is, does it really matter where the CEO lives? If they hired someone who was based up in Boston or NY, do they have to move the HQ? Not really. So many companies are de-centralized in how they operate today. Especially for an organization as large as Bank of America. Ken Lewis spends a ton of time up in NYC but he lives here. BofA probably has 6 or 7 million sq ft of office space here, many infrastructure components, and building another tower in uptown. I work for a very large IT company that's based in CA. I'd say there are probably a handful of executives that live in the HQ'd bay area city. Most employees either work out of the home or work in one of our dozen or so regional offices.

Its not uncommon to move the 'official' HQ to where the CEO lives. It has been done in Charlotte's favor. But that does not necessarily mean a large impact on jobs, for the reasons you stated.

[krazeeboi]

If the HQ did move, that would still knock us down a notch in terms of prestige, even if jobs weren't affected. That counts for something in my book, especially since it would be the second such loss within a relatively short period of time. To go from being the home of the 2nd and 4th largest banks in the nation to being the home of none? You can't tell me that wouldn't hurt guys.

[HopHead]

If the HQ did move, that would still knock us down a notch in terms of prestige, even if jobs weren't affected. That counts for something in my book, especially since it would be the second such loss within a relatively short period of time. To go from being the home of the 2nd and 4th largest banks in the nation to being the home of none? You can't tell me that wouldn't hurt guys.

I don't think anyone denies that it would hurt... To me it's always amazing how when someone high up leaves the company the whole HQ relocation talk starts up. Yea, I would like to see more execs with NC backgrounds, but just b/c a CEO may not be from here doesn't mean he's going to up and move the bank to Manhattan either. BofA has far more bigger issues to worry about now than the location of it's corp HQ.