Bank of America BAC on Friday named four outsiders to its embattled and newly expanded board of directors, after two others resigned from the board over the past week.
The largest U.S. bank announced the appointments of Susan S. Bies, a former Federal Reserve System governor and former chief financial officer of First Tennessee National; William P. Boardman retired executive of Bank One and Visa International; D. Paul Jones, former chairman and CEO of Compass Bancshares; and Donald E. Powell, former chairman of the Federal Deposit Insurance Corp. and former president and CEO of First National Bank of Amarillo. All are in their 60s.
The board's election of the four expands the board's size to 20 from 18 — a move that comes three weeks after the Charlotte-based bank said it had approached executive search firms about finding new directors. Board Chairman Walter Massey said then that it was unclear how many directors could be affected or who might step down.
On Thursday, the bank disclosed the resignation of outside director Robert Tillman, former chairman and CEO of home improvement chain Lowe's. Tillman's resignation, effective May 29, was not a result of any disagreement with Bank of America or its management, the bank said in a regulatory filing.
Also on May 29, the bank announced the resignation of the lead outside director, O. Temple Sloan Jr. Sloan had been among the board members who have come under fire from shareholders over the handling of Bank of America's takeover of Merrill Lynch.
Criticism over the deal also led Bank of America's president and CEO, Kenneth Lewis, to have the board chairman title stripped from him in an April 29 shareholders vote.
Massey said on Friday that the new directors "bring a wealth of experience in financial services from a variety of perspectives. Their participation will make our board even stronger as we move our company toward achieving its true potential."
Lewis said, "I look forward to working with our new board members and taking advantage of their counsel."
It has been speculated that federal officials have been pressuring the bank to revamp its board to bring in directors with more banking experience.
Bank of America spokeswoman Eloise Hale said Friday the bank doesn't comment on discussions with regulators.
As part of the government's stress tests of the 19 largest U.S. banks, which included Bank of America, financial firms have been advised to review their boards and management.
The government mandated that Bank of America raise nearly $34 billion in additional capital as a buffer against potential future losses. The bank has already received $45 billion in government funds as part of the Treasury Department's $700 billion financial rescue package.
Investors who have watched Bank of America's stock price plummet have been particularly upset over the bank's decision to buy investment bank Merrill Lynch. The acquisition, which the government helped orchestrate the same weekend in September 2008 that Lehman Brothers failed, has cost the bank billions. After the acquisition deal was sealed Jan. 1, it was disclosed that Merrill Lynch reported $15 billion in fourth-quarter losses and paid out millions in bonuses to employees.
Shareholders have also pressed for Lewis' removal as CEO, leaving many people wondering how long he can hold on to that post. Lewis has vowed to remain CEO to guide the bank through the current economic crisis.
Bank of America announced Friday's board appointments after its shares fell a penny to close at $11.86.