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No takers for America’s most prestigious job

IT is the most prestigious job that nobody wants.

Bank of America is searching for a new chief executive, and by all accounts, it is having a tough time finding someone for the job. Heading up Bank of America, an appealing task in better times, has become unpalatable to potential candidates from outside the bank amid a bevy of operational, regulatory and political challenges.
“This job doesn’t have all the advantages it would normally have,” said Anthony Polini, an analyst with Raymond James Financial Services. The bank is struggling to staunch real estate and consumer credit losses, while simultaneously integrating two large businesses mortgage lender Countrywide Financial and brokerage Merrill Lynch & Co.
On top of that, government regulators are bearing down hard on Bank of America, issuing a secret regulatory oversight agreement, overhauling the company’s board and mandating pay cuts for some top employees. The bank needs to not only maximise shareholder profit, it must also placate regulators and politicians.
As a result, high profile external candidates linked with the job like Bank of New York Mellon’s CEO Bob Kelly and BlackRock CEO Laurence Fink have either declined the post, or denied any interest in the position to begin with.
“Who wants this headache right now? Nobody,” said Paul Miller, a bank analyst with FBR Capital Markets.
Some internal candidates are still expressing interest. Brian Moynihan, head of the bank’s consumer unit, told Reuters on he would take the top job if offered it. “Anybody would want this job, it’s one of the best jobs in the business,” he said before a speaking engagement in Los Angeles.
A CNBC report on Monday said Moynihan and Greg Curl, chief risk officer, were two finalists for the position, and the board was divided on them. Although some investors would like to see the bank pick a CEO as soon as possible, others recognise that the process will take time.
“A 90-120 day period would not be unusual in a search like this,” said Dan Genter, CEO of RNC Genter Capital, which owns 400 000 shares. “There’s a significant amount of searching and it’s very difficult to find a candidate for this job.” The bank
has until the end of the year to replace outgoing chief Kenneth Lewis, scheduled to retire on December 31.
The bank’s credit problems are the key to relieving the pressure of government involvement in the business, analysts said. Bank of America has said its credit problems appear to be peaking, but they are far from cured. The bank said it wrote off US$9,6 billion of loans as uncollectible in the third quarter, up 10,6% from second quarter 2009, and more than double third quarter’s 2008 levels.
The bank also said US$33 billion, or 3,72% of total assets were not performing in the third quarter, up from 3,31% in the second quarter 2009 and 1,45% in third quarter 2008. Once the bank’s loan book stabilises, it can start to pay back the US$45 billion it borrowed from the US government, which came with some serious strings attached.
Most notably, the US government pay czar, Kenneth Feinberg, is telling Bank of America how to compensate its best-paid employees. Bank of America has argued the limits imposed by the added regulation, like the pay czar’s compensation limits, hurt its ability to compete against other financial firms. — dnews24.com.

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