Why Bank of America's Ken Lewis Will Take Home More Than Peers

"The guy devoted his life to the business," Bove said.

The extraordinary length of Lewis' tenure and the size of Bank of America -- with more than $2.2 trillion in assets, it is the largest bank holding company in the country, according to the Federal Reserve -- helps explain why Lewis will out-earn many of his peers when he leaves his desk, experts said.

But that's not the only factor.

"What we're talking about is a pay package that was constructed in an era when it was felt by boards that CEOs should get as much money that God could give them," Bove said.

Lewis' participation in a now-frozen Bank of America executive retirement program, known as a supplemental executive retirement program or SERP, is what accounts for most of his $53 million pension. The bank froze the program in 2002 in favor of offering more performance-based compensation, but not before Lewis accumulated tens of millions.

"It's always been one of the largest retirement packages in the S&P 500," said Paul Hodgson, senior research associate at the compensation research firm The Corporate Library.

Hodgson is a critic of supplemental executive retirement programs -- which have been used by many companies over the years -- and said that the Bank of America board should have eliminated its SERP completely.

"If the board had been true to its colors in terms of saying we're going to move away from fixed pay to performance related to pay, they would have terminated the plan," Hodgson said. "They could have said, 'Given the amount of stock you own, we don't think you need a pension.'"

Will the Feds Cut Lewis' Pay?

It's unclear whether the federal government will rein in Lewis' retirement compensation through the powers granted to executive pay czar Kenneth Feinberg, who is reviewing pay packages for top executives at seven companies that have received "exceptional assistance" from the federal government, including Bank of America.

An Obama administration official indicated to ABC News Wednesday that while any compensation Lewis received after June 15 will be subject to Feinberg's review, the verdict is still out on Lewis' retirement benefits, which were accrued largely before the bailouts began.

"Regarding those, [Feinberg] is currently reviewing all Bank of America arrangements, including Mr. Lewis', and is in the course of determining how to address those arrangements in his forthcoming determinations," the official said.

ABC News' Matthew Jaffe contributed to this report.

-- This embed didnt make it to copy for story id = 8775299. -- This embed didnt make it to copy for story id = 8775299. -- This embed didnt make it to copy for story id = 8775299. -- This embed didnt make it to copy for story id = 8775299. -- This embed didnt make it to copy for story id = 8775299. -- This embed didnt make it to copy for story id = 8775299.
Page
  • 1
  • |
  • 2
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...