Bank of America CEO's got a talent for making money
— -- This story was originally published on Sept. 18, 2008
Time magazine put Bank of America CEO Kenneth Lewis on its 2007 list of the world's 100 most influential leaders, but for 2008, the one-year wonder was expunged from the list like a bad loan.
Lewis is back. His influence is undeniable after BofA's BAC rescue of Countrywide Financial in January and of Merrill Lynch this week. He should be among the world's Top 10 most influential, says Hugh McColl, 73, the BofA CEO who retired in 2001 to make way for Lewis.
"This is one of the most powerful financial institutions in the world," says McColl, who then pauses to correct himself. "Most powerful in the world would be more accurate."
In a separate interview Wednesday, Lewis says he doesn't think himself so mighty, although he can't think of a financial company with more global sway. He's come a long way since being born 61 years ago — in Meridian, Miss., because his hometown of Walnut Grove 55 miles away had no hospital. He was schooled in finance at Georgia State and has worked 39 years at the same company as it grew to become one of the world's most profitable, not like so many in the oil business, but in the beleaguered orb of banking that every day seems to teeter closer to collapse.
BofA has become a cavalry of sorts led by Capt. Lewis. He takes some satisfaction in lending the economy a hand with the rescue of Countrywide and Merrill, but "we're not the federal government," and says the acquisitions were not born of goodness, but because they will prove wise.
McColl agrees. "I don't know what the public thinks, but he's risk averse. He doesn't take crazy risks," says the former CEO.
Roots made him hungry to succeed
At age 10 or 11 Lewis' parents divorced. His father, then an Army sergeant, has died. His mother, Byrdine, 83, raised her children working two shifts as a nurse. Lewis says he has been employed since age 12 at, among other jobs, a filling station, a steel mill, and selling greeting cards door to door. Lewis says he was lower middle class, "not dirt poor," but McColl says Lewis was poor and that it played a role in his success.
"Hungry people do better. People who worked with me from modest backgrounds were the moneymakers," McColl says.
Lewis put himself through college, then landed his first full-time job in 1969 as a credit analyst at North Carolina National Bank (NCNB) and has remained four decades through mergers, acquisitions and name changes. Many of those years were as McColl's go-to man.
"He never took an assignment for which he did not succeed," McColl says. In the company, Lewis grew to be known as Little Hugh as McColl orchestrated so many acquisitions that the 60-story Charlotte headquarters became known as the Taj McColl.
McColl got the attention, but it was Lewis who made things work. He was in charge of the layoffs. He ironed out the culture clashes. All the while, he led projects, such as those that put BofA on the cutting edge of banking's Internet transition.
"We're different animals," McColl says. "I've always said that Ken is a much better businessman."
McColl says he always thought he was good at making the company a lot of money, but, "I wasn't as good as he is."
If Lewis has one thing in common with McColl, it's determination to grow BofA into a finance behemoth. Lewis became CEO in 2001 and in 2003 swallowed FleetBoston Financial for $48 billion, in 2005 bought MBNA for $35.4 billion and China Construction Bank for $7.2 billion.
But McColl is the flamboyant one who in retirement is a Charlotte philanthropic and social fixture. Lewis is often described as cold and dispassionate.
"I don't think those who know me would call me cold," says Lewis, who agrees he is quiet but says that's because he likes to listen. "(McColl) is a very charismatic leader. I may be more dispassionate about making decisions; he is a little more emotional."
"He's a thoughtful, reserved guy," says Chris Kearney, CEO of SPX, one of eight other Fortune 500 companies based in Charlotte. Kearney says he knows Lewis professionally, and sometimes sees him and his wife, Donna, at Barrington's restaurant on Fairview Road, where entrees run about $30.
Lewis is not introverted, Kearney says. Whenever SPX reports good quarterly earnings, Lewis is on the phone with congratulations. SPX moved to Charlotte from Muskegon, Mich., shortly after Lewis became BofA's CEO, and "Ken has taken a particular interest in our growth," Kearney says.
Lewis met Donna when she was his boss' secretary (his boss was not McColl at the time). Each had a child from a previous marriage, and they now have two grandchildren, 5 and 3.
New York's a nice place to visit
Being in Charlotte, 640 miles from Wall Street, has not insulated BofA from industry woes. Lewis' salary has been a flat $1.5 million three years running, his $5.7 million bonus of 2005 falling to zero in 2006 and 2007. BofA stock, which was nearly $55 a share two years ago, closed Wednesday at $27.20, down nearly 8%. However, while Merrill Lynch was losing $4.9 billion in the latest quarter, BofA earned $4.2 billion, making it the world's 23rd most profitable company over the three months, according to BofA's most recent investor factbook.
Lewis says he has given no thought to making Time's 2009 list of most influential leaders. Osama bin Laden was also on the 2007 list. He didn't attend the New York gala. Neither did Lewis.
"I had to work," Lewis says. "I must say, I'm not a gala person."
McColl, more the gala type, says he still finds joy when the North Carolina company outperforms and acquires the financial giants of New York. "We're not all dumb down here, you know."
Lewis says he also once enjoyed defeating New Yorkers in high finance, remembering that when he got his first New York assignment in 1977 he could not get a mortgage. The banker said he would not be able to live in New York on his Charlotte salary.
"I've gotten past that," Lewis says. "I'm in New York a lot. I really do love the place."