By Christina Rexrode
Bank of America Corp.'s board voted to make Brian Moynihan
chairman as well as chief executive, capping a comeback for a
banker who survived the regulatory scrutiny and huge losses that
followed the financial crisis.
The Charlotte, N.C., lender--the second-largest U.S. bank by
assets--said the current chairman, Chad Holliday, will remain on
the board as Mr. Moynihan, 54 years old, expands his duties.
The bank split the roles of chairman and CEO in 2009 after a
shareholder vote pressured it to do so, when Ken Lewis held both
jobs.
Mr. Moynihan has led the bank in a time unlike any in recent
history, where the emphasis is on shrinking instead of expanding.
It is also a time of increased government scrutiny.
After early struggles, Mr. Moynihan this year marked two
milestones in the bank's effort to shake off the financial crisis.
It received permission from the Federal Reserve to raise its
quarterly dividend. And its $16.65 billion mortgage-securities
settlement with the Justice Department in August, Mr. Moynihan has
said, was the last of the big crisis-era litigation involving
BofA.
Mr. Moynihan became CEO the year after Mr. Lewis was stripped of
the chairman's title by shareholders in 2009 and resigned later
that year.
With Wednesday's move, Jack Bovender, former CEO and chairman of
HCA Inc., will become the bank's lead independent director. Mr.
Holliday, former CEO and chairman of DuPont Co., had been chairman
since 2010.
Mr. Moynihan took over at the bank when it was reeling from the
effects of its purchase of mortgage lender Countrywide Financial
Corp. and investment bank Merrill Lynch.
Mr. Moynihan has made it a priority to shrink the bank and make
it simpler, a departure from the empire-building days of his
predecessors, Mr. Lewis and Hugh McColl Jr.
Wading through a mountain of litigation that the bank
accumulated from the financial crisis, much of it related to
Countrywide, also has been a main focus.
Mr. Moynihan has stumbled as well. In 2011, he was caught off
guard when the Federal Reserve rejected the bank's request to raise
its dividend. The bank was often in the cross hairs of regulators
and of consumer lawsuits. Its settlement in August with the Justice
Department was the biggest fine that the U.S. government ever has
levied against a single organization. Many of those securities were
from Countrywide.
The bank this year suffered an embarrassment when it had to
resubmit its "stress test" plan to the Fed after discovering it had
made an error in the way it was calculating capital levels.
Mr. Moynihan wasn't the CEO when Bank of America bought
Countrywide in 2008, but he was a top executive. He wasn't always
the first choice of some board members after Mr. Lewis stepped down
under pressure.
Over time, though, Mr. Moynihan's power cemented as some of his
critics left the board. In a statement Wednesday, Mr. Holliday
cited Mr. Moynihan's efforts to simplify the company. "The board
strongly supports the strategy that Brian has set," Mr. Holliday
said.
The move had been informally discussed among board members at
least as early as early 2013, said people familiar with the matter.
Some board members who had argued against it have since left.
Mr. Moynihan, a lawyer by training, started his career at a law
firm and worked on deals for FleetBoston. It was that bank's chief
executive, Terry Murray, who offered Mr. Moynihan a job--and Mr.
Moynihan was soon steered from the legal department into corporate
strategy.
By the time Bank of America bought Fleet in 2004, Moynihan was
in charge of the brokerage and wealth-management unit. Mr. Lewis
gave him a similar position in the combined new bank.
Over the next few years, as other Fleet veterans left, Mr.
Moynihan rose through the ranks. He made himself a reputation as a
"fixer," tackling difficult tasks like a revamp of the investment
bank.
Mr. Moynihan almost left the bank before he got a chance to be
CEO. In December 2008, as Bank of America watched losses from
Merrill balloon, Mr. Lewis wanted to shake up his management
team.
He offered Mr. Moynihan a job running the Delaware-based
credit-card unit, but Mr. Moynihan didn't want to move his family
from Boston.
The bank prepared a news release to announce Mr. Moynihan's
departure, but directors from the FleetBoston side pushed back, and
Mr. Lewis gave Mr. Moynihan the general-counsel job instead.
At a town-hall meeting in December 2009 to introduce Mr.
Moynihan as the future CEO, Mr. Lewis jokingly referenced how Mr.
Moynihan hadn't been the only person that the board talked to.
"Another unique characteristic about him is," Mr. Lewis said, to
a warm crowd of bank employees in Charlotte, "he wanted the
job."
Dan Fitzpatrick contributed to this article.
Write to Christina Rexrode at christina.rexrode@wsj.com
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