Former Citigroup Chief Financial Officer Sallie Krawcheck is joining Bank of America to run the company's global wealth and investment management operations.
Krawcheck's hiring Monday was part of a broader management shakeup at Bank of America, which also announced that its head of consumer banking was leaving and that other executives were being moved into new positions. The bank, which received $45 billion in bailout money, is under pressure from the government to improve its performance.
"Those are some substantive changes," said Tony Plath, a finance professor at the University of North Carolina at Charlotte. "The government is pressing not only for changes in BofA's board, but in their management team."
Krawcheck is taking over for Brian Moynihan, who will become head of consumer banking. Moynihan is succeeding Liam McGee, who is leaving the company after a nearly 20-year career.
Tom Montag, who currently runs the bank's global markets unit, will assume another role from Moynihan, the bank's global corporate and investment banking unit.
Major management changes at companies often raise questions about the future of its top executives. Bank of America CEO Ken Lewis has been under particular scrutiny since he was stripped of his chairman's title in April, and also because of the company's acquisition of investment bank Merrill Lynch.
On Monday, Bank of America said separately that it agreed to pay a $33 million penalty to settle government charges that it misled investors about Merrill Lynch's plans to pay bonuses to its employees during the time it was acquiring the Wall Street firm. Bank of America did not acknowledge any wrongdoing as part of the settlement.
The bank has been among the hardest hit banks by the credit crisis and ongoing recession. It received $25 billion at the peak of the credit crisis last fall and another $20 billion, plus guarantees to protect the bank against losses on some risky investments, after acquiring Merrill Lynch.
"[The government] wants BofA's senior ranks to be populated by people outside of legacy Bank of America," Plath said.
Krawcheck left Citigroup in a management shuffle in late 2008 after serving as head of the company's global wealth management division and before that, chief financial officer.
Citigroup has been among the biggest recipients of government support amid the downturn. The bank has received $45 billion in loans and guarantees to cover hundreds of billions in potential losses on risky investments. It has also undergone major management changes in recent months, which analysts say came at the government's insistence.