The next-to-last domino has fallen: Bank of America's Ken Lewis rounds out the list of Wall Street chief executives who won't seek bonuses for last year.
In an internal e-mail reported by the Charlotte Observer and picked up by major news media, Lewis said he'd asked the board of directors to award no bonuses to him or other senior executives for 2008. Last week, Citigroup Chief Executive Vikram Pandit said he wouldn't ask for a bonus.
That makes five of the six biggest U.S. bank CEOs on the no-bonus list. The exception, John Stumpf of Wells Fargo, has not given up on getting a bonus "as yet," Reuters editorialized. (Unlike most of its big-bank counterparts, Wells Fargo remained profitable throughout 2008 and its share price dropped just 2.4 percent for the year, compared with declines of 40 percent or more elsewhere.) Many top executives of European bulge-bracket institutions won't get bonuses either.
Bank of America, whose purchase of Merrill Lynch was completed on Jan. 1, was among numerous U.S. financial institutions that received capital injections from the U.S. Treasury Department under bank rescue legislation enacted in October. The taxpayer-funded bailouts prompted angry demands from citizens and lawmakers that banks not hand out any bonus money, especially to CEOs and other high-ranking executives.
Lewis' e-mail to BofA employees didn't mention those political pressures, but cited the "pay-for-performance" doctrine. Noting that BofA's share price sank 66 percent, he wrote: "It is only fair that our most senior executives, who have been rewarded in past years when our company and stock price performed, should now share in the pain as performance has lagged."